UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d) of
The Securities Exchange Act of 1934
MILLENIUM HOLDING GROUP, INC.
(Name of Small Business Issuer)
September 30, 2000 0-28431
For the Quarter Ended Commission File Number
Nevada 88-0109108
(State of Incorporation) (I.R.S. Employer Identification Number)
3800 Old Cheney Road Suite 101-222
Lincoln, NE 68516
(Address of Principal Executive Offices Including Zip Code)
(402) 434 5690
(Issuers Telephone Number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or such shorter
period that the registrant was required to file such reports), and (2) has been
subject to filing requirements for the past 90 days. YES [X] NO [ ]
Number of shares outstanding of each of the issuer's classes of common equity,
as of November 10, 2000: 11,511,904
Transitional Small Business Disclosure Format: Yes [ ] No [X]
<PAGE>
MILLENIUM HOLDING GROUP, INC.
INDEX
Page
----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheet at September 30, 2000 3
Statement of Operations for the three and nine
months ended September 30, 2000 4
Statement of Changes in Stockholders' Equity
for the nine months ended september 30, 2000 5
Statement of Cash Flows for the three and nine
months ended September 30, 2000 6
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis 10
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities and Use of Proceeds 13
Item 3. Default Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
2
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PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
MILLENIUM HOLDING GROUP, INC.
BALANCE SHEET
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
UNAUDITED
ASSETS
ASSETS
Cash in bank $ 2
Reinstatement costs (net of amortization of $2,842) 16,103
Proprietary insurance products 734,218
Insurance agency 20,379
Overriding royalty interest - Rusk and Harrison Counties, Texas 1
-----------
TOTAL ASSETS $ 770,703
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accounts payable $ 14,413
Accrued wages 71,250
Accrued payroll taxes 6,052
Accounts payable - stockholder 66,670
-----------
TOTAL LIABILITIES $ 158,385
===========
STOCKHOLDERS' EQUITY
Common stock, $.05 par value, 50,000,000 shares authorized,
11,511,904 shares issued and outstanding $ 1,180,097
Paid-in capital 2,115,175
Retained earnings (deficit) (186,330)
Deficit accumulated during the development stage (2,496,624)
-----------
Total stockholders' equity 612,318
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 770,703
===========
See accompanying notes to financial statements.
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MILLENIUM HOLDING GROUP, INC.
STATEMENT OF OPERATIONS
FOR THE QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2000
UNAUDITED
For the Quarter For the Nine Months
Ended Ended
September 30, 2000 September 30, 2000
------------------ ------------------
REVENUES 644 1,757
-------- --------
EXPENSES
Salaries and wages 22,500 67,500
Payroll tax expense 1,560 5,606
Amortization expense 947 2,842
Office expenses 20,310 30,772
Internet consulting fees (65,625) 28,125
Marketing consulting fees 10,925 10,925
Professional fees 8,436 36,120
-------- --------
TOTAL EXPENSES (947) 181,890
-------- --------
NET INCOME (LOSS) 1,591 (180,133)
======== ========
See accompanying notes to financial statements.
4
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MILLENIUM HOLDING GROUP, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
Common Stock Retained Deficit from
------------------- Paid-in Earnings Development
Shares Amount Capital (Deficit) Stage Totals
------ ------ ------- --------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
BALANCES, December 31, 1999 704,869 $1,094,406 $1,402,219 $ (6,197) $(2,496,624) $ (6,196)
Stock for professional services 225,000 11,250 32,800 44,050
Acquisition of assets for stock 1,488,815 74,441 680,156 754,597
5 for 1 forward stock split 9,093,220
Netactivity (180,133) $(180,133)
---------- ---------- ---------- --------- ----------- ---------
BALANCES, September 30, 2000 11,511,904 $1,180,097 $2,115,175 $(186,330) $(2,496,624) $ 612,318
========== ========== ========== ========= =========== =========
</TABLE>
See accompanying notes to financial statements.
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MILLENIUM HOLDING GROUP, INC.
STATEMENT OF CASH FLOWS
FOR THE QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2000
UNAUDITED
<TABLE>
<CAPTION>
For the Quarter For the Nine Months
Ended Ended
September 30, 2000 September 30, 2000
------------------ ------------------
<S> <C> <C>
Net income (loss) 1,591 (180,133)
-------- --------
Adjustments to reconcile net income to net
cash provided by operating activities
Amortization expense 948 2,842
(Increase) decrease in
Prepaid expenses 0 0
(Decrease) increase in
Accounts payable 9,200 14,413
Accrued wages 22,500 67,500
Accrued payroll taxes 1,559 5,604
Accounts payable-stockholder 18,775 45,726
-------- --------
Total adjustments 52,982 136,085
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES 54,573 (44,048)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES 0 0
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Stock issued for professional services (54,700) 44,050
-------- --------
NET INCREASE IN CASH (127) 2
CASH, beginning of period 129 0
-------- --------
CASH, end of period 2 2
======== ========
SUPPLEMENTAL DISCLOSURES
Noncash financing transactions
Acquisition of proprietary insurance products for
1,468,436 shares of stock 734,218
Acquisition of professional legal services for
100,000 shares of stock 5,000
Acquisition of insurance agency for 20,379
shares of stock 20,379
Acquisition of internet consulting fees for
75,000 shares of stock (65,625) 28,125
Acquisition of marketing consulting fees for
50,000 shares of stock 10,925 10,925
</TABLE>
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MILLENIUM HOLDING GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
STATEMENT OF INFORMATION FURNISHED
The accompanying financial statements have been prepared in accordance with
Form 10-QSB instructions and in the opinion of management contain all
adjustments (consisting of only normal and recurring accruals) necessary to
present fairly the financial position as of September 30, 2000. These results
have been determined on the basis of generally accepted accounting principles
and have been reviewed by our independent auditor.
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
AMEX Systems Corporation, a Nevada corporation, was incorporated December
22, 1969 for the purpose of merging other corporations together to achieve
savings from consolidations. The name of the Corporation was formally changed to
Millenium Holding Group, Inc. during 1999.
The Company had been inactive and has not actively conducted operations,
generated revenues or incurred expenses since 1995. During 1999 the Company
started up operations and is currently in full-time operations.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly,
actual results could differ from those estimates.
NOTE 2. MERGERS
In 1970, 1971 and 1994, the Company completed the mergers as follows:
1970 - WASATCH MINERAL AND CONSTRUCTION CORPORATION: This entity attempted
to conduct the business of mining and mineral exploration. Corporate stock was
issued in connection with the purchase of properties and these investments were
valued at approximately $482,276, but no significant revenues were earned. An
accumulated deficit from Wasatch Mineral and Construction for $365,820 was added
to the Company's stockholders' equity as a result of this merger and activity.
1971 - NATIONAL PUMICITE DEVELOPMENT CORPORATION: This entity owned a
patent application for manufacturing dense heat insulating and nonabsorbent
concrete. Corporate stock was issued in connection with this acquisition, which
was valued at $210,364.
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1994 - ENERGECO (A LIMITED LIABILITY COMPANY): This entity held oil and gas
leases in southwestern Oklahoma. After undergoing a 20 to 1 reverse stock split,
the Company issued 21,435,043 shares of stock in connection with this merger.
Additional business merger attempts were made in the years 1983 - 1988,
with no trans-actions completed. There were no merger documents signed and no
costs incurred in connection with these failed mergers; however, the Company
issued an additional 2,588,700 shares of stock in connection with them.
NOTE 3. PRIOR ACTIVITIES
During the period from 1969 through 1974, general and administrative costs
totaling $237,817 were incurred, including $165,792 in consulting fees. During
the period from 1975 through 1982, additional expenses totaling $740,711 were
incurred in connection with the issuance of additional shares of common stock.
During this period the Company earned no significant revenues. All expenses
incurred during the period from 1969 through 1982 were charged to operations.
NOTE 4. STATUS OF ACTIVITIES AND OPERATIONS
The Company had been inactive since 1995. In the opinion of management,
there are no liabilities, judgments or pending legal actions arising from prior
activities of the Company, mergers or merger attempts. The Company started up
operations again in 1999 and is currently in full operations.
NOTE 5. OVERRIDING OIL AND LIGNITE ROYALTY INTERESTS - RUSK AND
HARRISON COUNTIES, TEXAS
The Company acquired these properties in 1986 for 850,000 shares of stock.
The original recorded financial statement value of the properties was $1 and the
Company has earned no income from these properties to date.
NOTE 6. PROPRIETARY INSURANCE PRODUCTS
A stockholder and officer transferred proprietary insurance products that
had a cost of $734,218 in exchange for 1,468,436 shares of stock. These products
include prototypes to be used with actuarial sciences for pricing, reinsurance,
market research, development and contract forms. It is anticipated that these
products and services will be marketed to the insurance industry to generate
revenue for the Company.
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NOTE 7. INSURANCE AGENCY
A stockholder and officer transferred an insurance agency that had a value
of $20,379 in exchange for 20,379 shares of stock. The agency was transferred in
to service the proprietary insurance products previously transferred into the
Company.
NOTE 8. INCOME TAX RETURNS
The Company has not filed federal income tax returns for several years. The
failure to file income tax returns may subject the Company to fines not
exceeding $100 per year. As a result of the failure to file income tax returns,
the Company may have lost any tax benefits, which would otherwise arise from
prior year net operating losses.
NOTE 9. CONTINGENT LIABILITY
During a prior year, the Company entered into an agreement with John and R.
Blair Lund to make a market for the stock for the Company. Upon completion of
the agreement, these individuals were to be issued 25,000 shares of stock in
AMEX Systems Corporation and $5,000 cash in exchange for their services. In the
opinion of the Company's management, the agreement was not fully completed and
there remains a dispute with the Lunds for compensation earned for partial
completion of the agreement. This dispute originated in 1994 when EnergeCo was
merged into the Company.
NOTE 10. STATUS OF OTCBB LISTING
The Company was dropped from the Over-The-Counter Bulletin Board (OTCBB)
exchange listing effective August 30, 1999. The Company was reinstated on
December 29, 1999 to the OTCBB listing. The Company had incurred expenses of
$18,945 for this reinstatement and these costs are being amortized over five
years starting in 2000.
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<PAGE>
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
MANAGEMENT'S PLAN OF OPERATION
Millenium Holding Group, Inc. (OTC BB:MNHG) is a publicly traded and fully
reporting financial services Company in early stage development. The passage of
the Financial Modernization Act (Gramm-Leach-Bliley Act) will radically overhaul
the nation's banking, insurance and securities markets. The Act allows one
Company to possess all three disciplines. The Company has entered into a Letter
of Intent to acquire the Stanford Life Insurance Company, which it anticipates
closing within sixty (60) days. The officers and directors of the Company have
years of experience in the insurance industry. The Company is also actively
pursuing the creation of an Internet National Bank and exploring the possibility
of forming or acquiring a Broker Dealer in order to service the securities
market.
In order to receive a charter to operate an Internet National Bank, the
Company will follow the requirements as set by the Office of the Comptroller of
the Currency (OCC). The organizers understand the national banking laws,
regulations and sound banking operations and practices. The Board of Directors
of the Company has years of experience in the financial management field and has
begun recruiting competent management with the ability and experience to
successfully operate a bank of this type in a safe and sound manner.
The principal shareholders, Richard Ham and Ham Consulting Company will
meet the satisfaction of the Company's cash requirements in the near future in.
The principal shareholders have no expectations of reimbursement of the funds
advanced other than the possibility of restricted stock payment in lieu of cash.
It has no way of determining whether there will be any type of reimbursement in
the future.
The cost associated with the acquisition and leasing of the software
developed by Banking Software Co. and the integration technology created by IBM
as well as the hiring of the numerous employees necessary to launch the Internet
Bank will indubitable precipitate either a public offering or the existing
shareholders will re-invest on a private basis. The Company will raise at least
five million dollars ($5,000,000), net of all fees and organizational costs.
The software required for the Internet bank is in control of the majority
shareholder and will be leased to the Company by the principal shareholder. It
is state of the art and can service up to a fourteen billion dollar bank. The
Systems will provide an automation Systems with multi-currency and multi-lingual
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abilities. The core Systems is stable and secure with an adaptable foundation
that allows the Company to continue to focus its resources and attention on
delivering products and services to its customers. The software, which can be
adapted to the insurance business, will be the center of the Company's business,
consists of the following five components:
1. The Customer Information Component tracks data on all customers.
2. The Deposit Accounting component processes all deposit products,
ranging from checking, Money Market, savings, passbook and club
accounts to certificate of deposit, time deposit open accounts, OIDs
and IRAs.
3. The Loan Accounting component processes personal, credit line,
business and real estate loans.
The Transaction Processing component is the manager and dispatcher of
monetary transactions.
4. The Executive Information component houses the general ledger and is
the source of financial management information.
This very unique software will allow the Company to expand into the now
authorized banking field of insurance. The Company is now ready to embark on
said expansion and has the software in place to do so.
There is no other plan to develop new products within the next 12-month
period.
The Company is also intending to become a member of the Society for
Worldwide Interbank Financial Telecommunication (S.W.I.F.T.). It is the
Company's belief that membership in this organization will provide the bank
international access and credibility. The core banking Systems will be
interfaced with S.W.I.F.T. so that transactions will automatically be recorded
throughout the appropriate components of the automated Systems. This
organization provides low-cost competitive financial processing and
communication services of the highest quality, integrity and reliability.
The Company does not believe that it will encounter internal year 2000
problems in that the software is year 2000 compliant.
The Company will hire knowledgeable professionals for its customer
interface to offer personalized attention and service to the individual. It will
also hire a Chief Technology Officer and add other individuals who will bring
valuable experience to better service the Company's banking and insurance
customers.
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<PAGE>
Mr. Ham has sold to the Company certain proprietary insurance products for
restricted shares of the Company's stock. This information is set forth in a
Form 8-K filed on February 18, 2000, which is incorporated by reference.
On February 14, 2000 the registrant entered into a Letter of Intent with
Stanford Life Insurance Company, an Arizona corporation, wherein the registrant
indicated its intent to purchase all of the issued and outstanding common shares
of the company for stock and cash. The proposed transaction consists of a cash
purchase for the Statutory Capital and Surplus of Stanford and 125,000 shares of
restricted (Rule 144) shares of the registrant. The successful closing of the
acquisition is dependent upon respective board approvals, adequate financing,
completion of required due diligence (including the State of Arizona approval)
and an acceptable definitive agreement. This information is set forth in a
certain 8 K filed on February 18, 2000, which is incorporated by reference. The
necessary documents are now being submitted to the State of Arizona for final
approval.
On February 25, 2000 The Board of Directors approved a 5 for 1 forward
stock split. The Record Date was March 13, 2000 and the Pay Date was March 20,
2000. This information is set forth in a certain 8 K filed on March 4, 2000,
which is incorporated by reference. It was also reported in this Form 8 K that
Mr. Ham now held 64.6% of the outstanding shares of the registrant.
On April 22, 2000 the company executed an agreement wherein it purchased a
certain insurance agency from Mr. Richard Ham the President of the company as
well as the beneficial owner of the majority of the registrant's common shares
of the company. The amount of consideration received by Mr. Ham will be
$20,379.00 payable with 20,379 Restricted (R144) shares of the Common Stock of
the registrant. The Agreement evidencing said transaction and the applicable pro
forma financials have been set forth in a Form 8-K filed on May 1, 2000 which is
incorporated by reference.
On July 11, 2000 the Company has entered into a contract with IBM and
Yojna, Inc. IBM will contractually provide a highly skilled staff of consultants
and technicians to manage the entire Millenium project from design to
implementation. Yojna is a high technology software products and services
company and will supply its ACCORD FinancialNet software to Millenium to be used
in the company's Internet Bank. The Agreement evidencing said transaction has
been set forth in a Form 8-K filed on July 13, 2000 which is incorporated by
reference
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PART II. OTHER INFORMATION
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any litigation and to its knowledge, no
action, suit or proceedings against it has been threatened by any person or
entity.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULT UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
There have been six reports filed on Form 8-K and all are incorporated
by reference.
1. February 18, 2000 disclosing acquisition of assets from the
President of the registrant and a letter of intent indicating the
acquisition of Stanford Life Insurance Company.
2. March 4, 2000 which disclosed a five for one stock split
3. March 16, 2000 disclosing a change of CUSIP number by the NASD.
4. March 17, 2000 disclosing the stock symbol was changed.
5. May 1, 2000 disclosing the acquisition of an insurance agency
from Mr. Ham the majority shareholder.
6. July 13, 2000 disclosing the execution of a contract by the
company with IBM and Yojna.
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SIGNATURE
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
MILLENIUM HOLDING GROUP, INC..
November 17, 2000 /s/ Richard L. Ham
--------------------------------------
Richard L. Ham, Director and President
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