Form 10-QSB for AMERICAN ACCESS TECHNOLOGIES, INC. filed on June 26, 1998
SECURITIES AND EXCHANGE COMMISION
Washington, DC 20549
FORM 10-QSB/A
[XX] Quarterly Report Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934 For the quarterly period ended
March 31, 1998
OR
[ ] Transition Report Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
For the transition period from ______________ to ________________
* * * * * * * * * * * * * * * * * * * * * *
Commission File No. 333-43589
AMERICAN ACCESS TECHNOLOGIES INCORPORATED
A Florida corporation
(Exact name of registrant as specified in charter, and state incorporated)
* * * * * * * * * * * * * * * * * * * * * *
Employer Identification No. 59-3410234
Altamonte Springs Florida 238 N. Westmonte Dr. Suite 210 32714
(Address of principal executive offices of registrant)
(407) 865-7696
(Registrant's telephone number, including area code)
* * * * * * * * * * * * * * * * * * * * * *
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 Exchange Act of 1934
during the preceding 12 months (or for such shorter 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 [X]. NO [ ].
The number of shares of AMERICAN ACCESS TECHNOLOGIES INC. Common Stock (Par
Value $0.001) outstanding at March 31, 1998 was 2,970,000
1
<PAGE>
American Access Technologies
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AMERICAN ACCESS TECHNOLOGIES, INC.
(A Development Stage Enterprise)
Consolidated Balance Sheets
<TABLE>
<CAPTION>
Condensed
from
Assets Audited
------ Financial
Mar. 31, 1998 Statements
UNAUDITED Dec. 31, 1997
----------------------------------------------
<S> <C> <C>
Current Assets:
CASH AND CASH EQUIVALENTS $271,125 $442,555
ACCOUNTS RECEIVABLE 127,669 11,436
INVENTORY 27,544 21,586
PREPAID EXPENSES 3,779 3,547
----------------------------------------------
Total Current Assets 430,117 479,124
Property, Plant, and Equipment:
FURNITURE AND EQUIPMENT 44,697 41,903
ACCUMULATED DEPRECIATION (9,386) (6,626)
----------------------------------------------
Total Property, Plant, & Equipment 35,311 35,277
Other Assets
PATENT COST 22,583 22,583
OTHER ASSETS 3,597 3,598
----------------------------------------------
Total Other Assets 26,180 26,181
==============================================
Total Assets $491,608 $540,582
==============================================
Liabilities and Stockholders' Equity
------------------------------------
Current Liabilities:
ACCOUNTS PAYABLE $52,469 $17,705
ACCRUED EXPENSES 49,883 83,120
------ ------
Total Current Liabilities 102,352 100,825
COMMITMENTS AND CONTINGENCIES ---- ----
Stockholders' Equity:
PREFERRED STOCK
$ .001 par value; authorized
1,000,000 shares; none issued
COMMON STOCK
$ .001 par value; authorized 10,000,000
shares; issued & outstanding, 2,970,000 shares 2,970 2,970
ADDITIONAL PAID IN CAPITAL 929,490 929,490
DEFICIT ACCUMULATED DURING
THE DEVELOPMENT STAGE (543,204) (492,703)
----------------------------------------------
Total Stockholders' Equity 389,256 439,757
==============================================
Total Liabilities and Stockholders' Equity $491,608 $540,582
==============================================
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
AMERICAN ACCESS TECHNOLOGIES, INC.
(A Development Stage Enterprise)
Consolidated Statements of Operations
Unaudited
<TABLE>
<CAPTION>
Three Three
Months Months Cumulative
Ended Ended from
Mar. 31, 1998 Mar. 31, 1997 Inception
----------------------------------------------------------------
<S> <C> <C> <C>
Income
Revenues $129,799 $0 $361,421
Costs and Expenses
DIRECT COSTS 61,119 0 126,599
MANAGEMENT EXPENSE 42,000 66,938 373,538
MARKETING & PROMOTIONS 16,615 0 55,436
PRODUCT DEVELOPEMENT 13,124 5,503 30,797
GENERAL & ADMINISTRATIVE 52,243 112,532 323,432
----------------------------------------------------------------
Total Costs & Expenses 185,101 184,973 909,802
----------------------------------------------------------------
Operating Loss (55,302) (184,973) (548,381)
Other Income (Expense)
Interest Income 4,804 0 8,796
Interest Expense (5) (2,414) (3,621)
----------------- ------------- -----------
Total Other Income (Expense) 4,799 (2,414) 5,175
Loss from continuing operations (50,503) (187,387) (543,206)
Income from discontinued operations 4,606
---------------- ------------ -----------
Net Loss $(50,503) ($187,387) ($538,600)
================ ============ ===========
============================================
Net Loss Per Common Share ($0.02) ($0.06)
============================================
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
AMERICAN ACCESS TECHNOLOGIES, INC.
(A Development Stage Enterprise)
Statement of Cash Flows
Unaudited
<TABLE>
<CAPTION>
Three Three
Months Months Cumulative
Ended Ended from
Mar. 31, 1998 Mar. 31, 1997 Inception
----------------------------------------------------------------
<S> <C> <C> <C>
Cash Flows from operating activities:
Net income (loss) ($50,503) ($187,387) ($538,600)
----------------------------------------------------------------
Adjustments to reconcile net income (loss) to net cash
provided by (use in) operating activities:
Depreciation and amortization 2,760 684 9,386
(Increase)/ decrease in assets:
Common stock issued for services 75,000
Accounts receivable (116,232) 900 (127,668)
Inventory (5,958) (27,544)
Prepaid expenses (232) (20,923) (3,779)
Other 78 (3,598)
Increase/ decrease in liabilities:
Accounts payable
and accrued expenses: 1,527 19,292 102,244
----------------------------------------------------------------
Total adjustments (118,135) 31 24,041
----------------------------------------------------------------
Net cash provided by (used in)
operating activities (168,638) (187,356) (514,559)
----------------------------------------------------------------
Cash flows from investing activities:
Expenditures for development of patent (14,500)
Acquisition of property and equipment (41,903)
Purchase of furniture and fixtures (2,792) (4,328) (2,792)
----------------------------------------------------------------
Net cash provided by (used in)
investing activities (2,792) (4,328) (59,195)
----------------------------------------------------------------
Cash flows from financing activities:
Increase (decrease) notes payable (101,000)
Proceeds from issuance of common stock 442,515 850,777
Repayment of loan payable, stockholder (1,000)
Distribution to stockholder (4,606)
Other (400)
Net cash provided by (used in)
----------------------------------------------------------------
financing activities 341,515 844,771
----------------------------------------------------------------
Net increase (decrease) in cash
and cash equivalents (171,430) 149,831 271,017
Cash and Cash equivalents, Beginning 442,555 61,761 108
----------------------------------------------------------------
================================================================
Cash and Cash equivalents, Ending $271,125 $211,592 $271,125
================================================================
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
AMERICAN ACCESS TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31,1998 Unaudited
1. Basis of Presentation
The accompanying unaudited consolidated condensed financial statements at March
31, 1998 have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form
10-QSB and reflect all adjustments which, in the opinion of management, are
necessary for a fair presentation of financial position as of March 31, 1998 and
results of operations for the three months ended March 31, 1998 and 1997. All
adjustments are of a normal recurring nature. The results of operations for
interim periods are not necessarily indicative of the results to be expected for
a full year. The statements should be read in conjunction with the consolidated
financial statements and footnotes thereto included in the company's Form SB-2
filing statement for the year ended December 31, 1997.
2. Nature of Business and Summary of Significant Accounting Policies.
BUSINESS
American Access Technologies, Inc. develops specialized products for the
telecommunications industry. The company recently introduced its first
proprietary product, a Zone Cabling Termination Cabinet (the "Product") which it
plans to manufacture and distribute to the telecommunications industry. The
Product is a Device that is used in voice, computer and data transmission
systems throughout the world.
DEVELOPMENT STAGE ENTERPRISE
As noted above, the Company was incorporated on October 21, 1996. To date, the
Company has been principally engaged in organizational activities, the promotion
of its product and raising capital. Planned operations, as described above, have
commenced but revenue generated to date is not considered significant in
relation to the Company's business plan. Accordingly, the Company is considered
to be in the development stage, and the accompanying consolidated financial
statements represent those of a development stage enterprise.
NET LOSS PER COMMON SHARE
In 1997, the Company adopted Statements of Financial Accounting Standards (SFAS)
No. 128, "Earnings per Share" which requires the presentation of both basic and
diluted earnings (loss) per share.
Basic net loss per common share has been computed based upon the weighted
average number of shares of common stock outstanding during the periods. The
shares of common stock issued in connection with the stock split effected in
February 1997, have been considered outstanding for all periods. In addition,
the shares of common stock issued to a Director in February 1997, prior to an
initial registration of the Company's common stock and at a price at that time
have been treated as outstanding during the entire period, pursuant to the
Securities and Exchange Commission Staff Accounting Bulletins. The number of
shares used in the computation were 2,970,000 and 3,083,000 for 1998 and 1997
respectively. Diluted net loss per common share, assuming exercising of the
warrants granted, is not presented as the effect of conversion is
anti-dilutrive.
3. Commitments and contingencies
LEASE COMMITMENTS
The Company leases its administrative facilities under an operating
lease, which expires in 1999. Future minimum rentals due under the lease are
approximately as follows for the years ending December 31:
1998 $37,600
1999 37,600
---------
$75,200
=========
Rent charged to operations amounted to approximately $10,216 in 1998,
$35,000 in 1997, and $6,000 in 1996.
5
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PENDING LITIGATION
The Company is a defendant in a suit filed in January 1998 in
the 18th Judicial Circuit Court of Florida by Steve R. Jones, the Company's
President from April to August 1997, which seeks damages of $17,000 and a
declaratory judgment as to the enforceability of a consulting agreement with the
Company. The Company is vigorously defending the case and does not believe it
has any liability to the plaintiff. The case is in the early stages, and there
can be no assurance of the ultimate outcome.
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONSAND FINANCIAL CONDITION
THREE MONTHS ENDED MARCH 31, 1998 COMPARED WITH THE THREE MONTHS ENDED
MARCH 31,1997
REVENUES
Revenues for the three months ended March 31, 1998 increased by
$129,799 or 100%, to $129,799, compared to $0 for the three months ended March
31, 1997. The initial distribution of the Company's product did not occur until
the second quarter of 1997, as the Company was primarily involved in training
distributor's personnel in the operation, functioning and marketing of the
Company's product.
COSTS AND EXPENSES
Direct costs represent the cost incurred by the Company to have its
product manufactured and assembled by outside contractors. These costs
represented 47% of revenues for the three months ended March 31, 1998.
Management and consulting fees decreased by $24,938 to $42,000 for the
three months ended March 31, 1998. This decrease resulted from less fees paid
and accrued to the officers of the Company, who are also directors and
stockholders for the same period in 1997.
Product development costs incurred in the three months ended March 31,
1998 increased by $7,621 to $13,124, compared to $5,503 for the same period in
1997. This increase in costs occurred in the Company's continuing efforts to
modify and update its design to vendor specifications.
Marketing and Promotion expenses increased by $16,615 or 100%, in the
three months ended March 31, 1998 compared to $0 for the three months ended
March 31, 1997. This was a result of the company's effort to continue to develop
and market their product.
General and Administrative expenses decreased by $60,289, to $52,243
for the three months ended March 31,1998 compared to $112,532 for the three
months ended March 31, 1997. This decrease was the result of less costs
associated with the start up costs of operations in the previous year.
LIQUIDITY AND CAPITAL RESOURCES
The Company required cash for the operating activities of approximately
$168,638 during the quarter ended March 31, 1998. The use of cash is due
primarily to support expenditures for start up operations and manufacture,
promotion and distribution of its products.
The Company's operating and capital requirements in connection with its
operations have been and will continue to be significant. Based on its current
plans, the Company anticipates that revenues earned from product sales will be
the primary source of funds for operating activities. The Company believes that
revenues in addition to existing cash and cash equivalents remaining from
proceeds of it private offering, will be sufficient to meet its capital and
liquidity needs for the next 12 months. The Company also believes that cash
required to fulfill purchase orders will be available through bank borrowings or
factoring, if required. The company's primary customers are substantial
corporations with credit ratings that will support such credit arrangements.
The Company is still in the process of emerging from the development
stage and, therefore, has generated little revenue to date. As reflected in the
accompanying financial statements, the Company incurred a net loss of
approximately $50,503 for the quarter ended March 31, 1998 compared to a net
loss of $187,387 for the same quarter in 1997. Management's plans include the
following:
1. The Company has arranged for marketing in association with
manufacturers and distributors of telecommunications equipment,
which will enable the Company to obtain orders for its products
with a minimal expenditure of the Company's resources.
6
<PAGE>
2. The Company has arranged for manufacture of its products by an
outside supplier in order to minimize the financial requirements
necessary for production.
3. The company believes that it can acquire working capital through
sale of additional securities (including exercise of outstanding
warrants), or borrowing, including bank borrowing, in view of the
nature of its customer base. Nevertheless, the Company continues
to be subject to a number of risk factors, including the
uncertainty of market acceptance for its product line, need for
additional funds, competition, technological obsolescence and the
difficulties faced by start up companies in general.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is a defendant in a suit filed in January 1998 in the 18th
Judicial Circuit Court of Florida by Steve R. Jones, the Company's President
from April to August 1997, which seeks damages of $17,000 and a declaratory
judgment as to the enforceability of a consulting agreement with the Company.
The Company is vigorously defending the case and does not believe it has any
liability to the plaintiff. The case is in the early stages, and there can be no
assurance of the ultimate outcome.
SIGNATURES
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 thereunto duly authorized.
Date: June 26, 1997
AMERICAN ACCESS TECHNOLOGIES, INC.
(Registrant)
By: /s/ Bobby E. Story
----------------------------------------
Bobby E. Story
Secretary/Treasurer
Chief Financial Officer
By: /s/ Victor E. Murray
----------------------------------------
Victor E. Murray
President
7
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 271,125
<SECURITIES> 0
<RECEIVABLES> 127,669
<ALLOWANCES> 0
<INVENTORY> 27,544
<CURRENT-ASSETS> 430,117
<PP&E> 44,697
<DEPRECIATION> (9,386)
<TOTAL-ASSETS> 491,608
<CURRENT-LIABILITIES> 102,352
<BONDS> 0
0
0
<COMMON> 2,970
<OTHER-SE> 488,638
<TOTAL-LIABILITY-AND-EQUITY> 491,608
<SALES> 129,799
<TOTAL-REVENUES> 129,799
<CGS> 61,119
<TOTAL-COSTS> 185,101
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (4,799)
<INCOME-PRETAX> (50,503)
<INCOME-TAX> 0
<INCOME-CONTINUING> (50,503)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (50,503)
<EPS-PRIMARY> (0.02)
<EPS-DILUTED> (0.02)
</TABLE>
