As filed with the Securities and Exchange Commission on November __, 2000
Registration No. ________
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
------------------------------------------------
For quarter ended September 30, 2000
Commission File Number 0-29195
NEW MILLENNIUM MEDIA INTERNATIONAL, INC.
(Name of Small Business Issuer in Its Charter)
Colorado (7310) 84-1463284
--------------------------------------------------------------------------------
(State or jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
101 Philippe Parkway, Suite 300
Safety Harbor, Florida 34695
(727) 797-6664
(Address and Telephone Number of Principal Executive Offices
and Principal Place of Business)
John D. Thatch, President
New Millennium Media International, Inc.
101 Philippe Parkway Suite 300
Safety Harbor, Florida 34695
----------------------------
(Name, Address and Telephone Number of Agent for Service)
Copies to:
Gerald C. Parker, Chairman of the Board of Directors
7820 South Holiday Drive
Suite 320
Sarasota, Florida 34321
(941) 925-2500
Fax (941) 925-2503
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 [ ] No [X]
As of September 30, 2000 there were 24,099,462 shares of the Company's common
stock issued and outstanding.
<PAGE>
NEW MILLENNIUM MEDIA INTERNATIONAL, INC.
INDEX
Page
Part I Financial Information.................................................5
Item 1 Financial Statements ........................................5
Report of Independant Accountants............................5
Condensed Balance Sheet......................................6
Condensed Statement of Operations............................7
Condensed Statement of Cash Flows............................8
Notes to the Condensed Financial Statements..................9
Management Representation Letter............................10
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations............10
Overview....................................................10
Plan of Operations..........................................10
Results of Operations.......................................10
General and Administrative Expenses.........................10
Liquidity and Capital Resources.............................10
Item 3 Quantitative and Qualitative Disclosures About Market Risk..11
Part II Other Information....................................................11
Item 1 Legal Proceedings...........................................11
Item 2 Changes in Securities and Use of Proceeds...................11
Common Stock................................................11
Warrants....................................................11
Preferred Stock.............................................11
Use of Proceeds.............................................11
Item 3 Defaults Upon Senior Securities.............................12
Item 4 Submission of Matters to a Vote of Security Holders.........12
Item 5 Other Information...........................................12
Item 6 Exhibits and Reports on Form 8-K............................12
Signatures....................................................................12
4
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
--------------------------------------------------
Board of Directors and Shareholders
New Millennium Media International, Inc.
(formerly Progressive Mailer Corp.)
Safety Harbor, Florida
We have reviewed the condensed balance sheets of New Millennium Media
International, Inc. (formerly Progressive Mailer Corp.) (a development stage
company) as of December 31, 1999 and September 30, 2000, and the related
statements of operations and cash flows for the nine months ended September 30,
1999 and 2000. These financial statements are the responsibility of the
Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
statements consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying consolidated interim financial statements for them
to be in conformity with generally accepted accounting principles.
We have previously audited, conducted in accordance with generally accepted
auditing standards, the consolidated balance sheet as of December 31, 1998 and
1999, and the related statements of operations, stockholders' deficit and cash
flows for the years then ended (not presented herein), and in our report dated
June 1, 2000, we expressed a qualified report because of going concern
uncertainty on those consolidated financial statements. In our opinion the
information set forth in the accompanying condensed balance sheet as of December
31, 1999, is fairly stated in all material respects in relation to the condensed
balance sheet from which it has been derived.
Richard J. Fuller, CPA, PA
Clearwater, Florida
November 9, 2000
5
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NEW MILLENNIUM MEDIA INTERNATIONAL, INC.
(FORMERLY PROGRESSIVE MAILER CORP.)
(A DEVELOPMENT STAGE COMPANY)
CONDENSED BALANCE SHEET
<TABLE>
<CAPTION>
December 31, September 30,
1999 2000
(Unaudited)
------------ ------------
ASSETS
Current Assets:
<S> <C> <C>
Cash $ 2,063 $ --
Accounts Receivable 39,704
Inventories 548,862 3,255
Equipment Leased to Customers-Net -- 545,828
------------ ------------
Total Current Assets 550,925 588,787
------------ ------------
Furniture and Equipment-Net 3,964 464,237
------------ ------------
Other Assets
Prepaid expenses-net 417 54,491
Goodwill, net of accumulated amortization
of $22,587and $39,528, respectively 655,007 638,566
------------ ------------
Total Other Assets 655,424 693,057
------------ ------------
$ 1,210,313 $ 1,746,081
============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Notes payable - related $ 1,596,012 $ 1,627,482
Accounts payable 85,235 59,695
Accrued expenses payable 129,289 285,819
------------ ------------
Total Current Liabilities 1,810,536 1,972,996
------------ ------------
Stockholders' Deficit
Common stock, par value $.001; shares authorized,
75,000,000 shares issued and outstanding,
24,099,881 and 23,079,462 respectively 24,100 23,080
Preferred stock, par value $.001; shares authorized,
10,000,000 no shares issued and outstanding -- --
Additional paid in capital 448,991 452,511
Common stock subscribed, (1,620,000 shares) -- 803,500
Deficit accumulated during the development stage (1,073,314) 1,506,006
------------ ------------
Total Stockholders' Deficit (600,223) (226,915)
------------ ------------
$ 1,210,313 $ 1,746,081
============ ============
</TABLE>
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NEW MILLENNIUM MEDIA INTERNATIONAL, INC.
(FORMERLY PROGRESSIVE MAILER CORP.)
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENT OF OPERATIONS
(Unaudited)
For the For the From Inception
nine months nine months through
09/30/99 9/30/00 9/30/00
----------- ----------- -----------
Income $ 28,044 $ 102,864 $ 162,672
Costs and Expenses:
General and administrative $ 289,995 $ 459,771 $ 1,444,398
Interest expense 70,553 48,000 171,921
Depreciation and amortization 11,836 27,785 52,359
----------- ----------- -----------
Total costs and expenses 372,384 535,556 1,668,678
----------- ----------- -----------
Loss from Operations (344,340) (432,692) (1,506,006)
Net Loss $ (344,340) $ (432,692) $(1,506,006)
=========== =========== ===========
Basic Loss Per Common Share $ (0.014) $ (0.019) $ (0.065)
=========== =========== ===========
7
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NEW MILLENNIUM MEDIA INTERNATIONAL, INC.
(FORMERLY PROGRESSIVE MAILER CORP.)
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the For the From Inception
nine months nine months through
09/30/99 09/30/00 09/30/00
------------ ------------ ------------
Cash Flows from Operating Activities:
<S> <C> <C> <C>
Net loss $ (344,340) $ (432,692) $ (1,506,006)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization $ 11,836 $ 27,785 $ 52,559
Common stock issued for services 3,333 -- 24,838
Increase (decrease) in Accounts receivable -- (39,704) (39,704)
Increase (decrease) in inventories 65,719 545,607 (3,255)
Increase in Equipment Leased to Customers -- (545,828) (545,828)
Increase in prepaid expenses -- (54,438) (54,438)
Increase (decrease) in accounts payable 28,075
and accrued expenses $ -- $ 130,990 $ 345,514
------------ ------------ ------------
Total adjustments 108,963 64,412 (220,314)
------------ ------------ ------------
Net Cash Used in Operating Activities (235,377) (368,280) (1,726,320)
------------ ------------ ------------
Cash Flows from Investing Activities
Purchase of goodwill (338,797) (500) (678,094)
Purchase of fixed assets (2,125) (470,753) (482,212)
------------ ------------ ------------
Net Cash Used in Investing Activities (340,922) (471,253) (1,160,306)
------------ ------------ ------------
Cash Flows from Financing Activities
Proceeds from notes payable - Related 539,030 31,470 1,627,482
Proceeds from common stock transactions 32,333 806,000 1,259,144
------------ ------------ ------------
Net Cash provided by Financing Activities 571,363 837,470 2,886,626
------------ ------------ ------------
Increase in cash and cash equivalents $ (4,936) $ (2,063) $ --
Cash and cash equivalents at beginning of period $ 6,811 $ 2,063 $ --
------------ ------------ ------------
Cash and cash equivalents at end of period $ 1,875 $ -- $ --
============ ============ ============
Supplemental disclosure of cash flow information:
Cash paid during the year for interest -- -- --
Cash paid during the year for income taxes -- -- --
</TABLE>
8
<PAGE>
NEW MILLENNIUM MEDIA INTERNATIONAL, INC.
(FORMERLY PROGRESSIVE MAILER CORP.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. Organization and Basis of Presentation
--------------------------------------
New Millennium Media International, Inc. (formerly Progressive Mailer
Corp.) (NMMI or the Company) is in the business of marketing advertising
space in special advertising display machines. The accompanying unaudited
condensed financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information
in accordance with rules and regulations of the Securities and Exchange
Commission, in particular, Regulation S-B. Accordingly, they do not include
all of the information and footnotes required by generally accepted
accounting principles for complete financial statements and should be read
in conjunction with the Company's Annual Report (Form 10-KSB) for the years
ended December 31, 1998 and 1999. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results for the
quarter ended September 30, 2000 are not necessarily indicative of the
results that may be expected for the year ending December 31, 2000.
2. Development Stage Enterprise
----------------------------
The Company is a development stage enterprise, as defined in Financial
Accounting Standards Board Statement No. 7(SFAS No. 7). The Company is
devoting substantially all of its efforts in securing and establishing a
new business, and has engaged in limited activities in the advertising
business, but no significant revenues have been generated to date.
3. Going Concern Uncertainty
-------------------------
The Company has incurred recurring operating losses and negative cash flows
and has negative working capital. The Company has financed itself primarily
through the sale of its stock and related party borrowings. These
conditions raise substantial doubt about the Company's ability to continue
as a going concern.
There can be no assurance that the Company will be success in implementing
its plans, or if such plans are implemented, that the Company will be
successful.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern and do not include any adjustments
to reflect the possible future effect on the recoverability and
classification of assets or the amount and classification of liabilities
that might result from the outcome of this uncertainty.
4. Related Party
-------------
On August 4, 2000, the Company entered into a contract with Mobile Magic
Superscreen, LLC to purchase a mobile LED truck, fully operational and
functioning as a mobile LED display board. In exchange for the truck,
valued at $450,000, the Company will deliver 200,000 shares of Common Stock
and assume the note balance on the truck of $107,000.
5. Subsequent Events
-----------------
The Company increased the number of Common Stock authorized to 75,000,000
at a special Meeting of Stockholders on July 18, 2000. In addition, the
Company has secured an agreement Swartz Private Equity, LLC to provide an
equity line up to $25,000,000 and has filed an SB-2 Registration Statement
with the SEC in conjunction with this agreement.
9
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The discussion and financial statements contained herein are for the nine months
ended September 30, 1999 and 2000 and from inception through September 30, 2000.
The following discussion regarding the financial statements of the Company
should be read in conjunction with the financial statements of the Company
included herewith.
OVERVIEW
The Company is now fully operational. The monetary expenses as well as other
operational inefficiencies created by our recent change of location are now
behind us. September 7, 2000 the Company was relisted with NASDAQ OTC BB. Our
SB-2 registration statement was declared effective by the SEC on September 28,
2000 which registration is a prerequisite to the May 19, 2000 Investment
Agreement with Swartz Private Equity, LLC for a maximum of $25 million. The
Company purchased a truck mounted mobile LED board that is fully functional and
has already been booked for appearances at professional sporting events,
Universal Studios, Daytona Raceway, Disney Wide World of Sports and the New
Years Eve celebration at Walt Disney World. Negotiations are underway for
bookings at Super bowl XXXV. The Company's contract with Carson-Jensen-Anderson
Enterprises, Inc. to market the Illumisign-Eyecatcher display boards throughout
the 50 United States has resulted in contracts for over 140
Illumisign-Eyecatcher machines with Phar Mor Discount Drugs, C & K Markets,
Royal Cinemas and GKC Theaters. The Company is devoting substantially all of its
present efforts to implementing its operational and marketing plans designed to
establish new business accounts for its mobile LED boards and the
Illumisign-Eyecatcher static boards. All losses accumulated since inception have
been considered as part of the Company's development stage activities.
PLAN OF OPERATIONS
The statements contained in this section include projections of future results
and "forward-looking statements" as that term is defined in Section 27A of the
Act, and Section 21E of the Exchange Act. All statements that are included in
this report, other than statements of historical fact, are forward-looking
statements. Although Management believes that the expectations reflected in
these forward-looking statements are reasonable, it can give no assurance that
such expectations will prove to have been correct. Important factors that could
cause actual results to differ materially from the expectations are disclosed in
this report, including, without limitation, in conjunction with those
forward-looking statements contained in this report.
The primary activity of the Company currently involves two types of visual
advertising: The Illumisign-Eyecatcher movable display boards and LED display
board, both stationary and truck mounted. The Company retains ownership of both
types of the machines and sells the advertising space on a monthly basis.
GENERAL AND ADMINISTRATIVE EXPENSES
Comparable operations for the nine months ended September 30, 2000 and September
30, 1999 reflect the final stage expenses of negotiating and finalizing the
various contracts necessary to develop the national network for locating sites
and marketing the various advertisers necessary to place ads in the mobile LED
board and the Illumisign-Eyecatcher static display boards as well as the
expenses associated with the early stages of the implementation of those
contracts. The increase in income as well as the increase in general and
administrative expenses are indicative of this early stage development of the
Company. These expenses include costs of management and other indirect costs
including accounting, legal, filing fees, marketing, rent and other operating
costs.
RESULTS OF OPERATIONS
Management anticipates that operations, including Illumisign-Eyecatcher display
board inventories during the next few months will cause costs to slightly
increase relative to revenue generated from the rental of the display boards. As
the display boards are placed at site locations and advertisers begin placing
ads, it is anticipated that the revenues will gradually increase. Personnel
costs should also increase slightly with the increased advertising accounts. In
addition, certain direct costs including depreciation of display boards will
increase as these machines are placed at various site locations. Amortization
should remain the same.
LIQUIDITY AND CAPITAL RESOURCES
Cash used for operating activities totaled $283,574 for the nine months ended
September 30, 2000 vs. $(235,377) in the comparable period in 1999. Cash in the
current nine months was used primarily for the purchase of inventory as
reflected in the Assets Column of the Condensed Balance Sheet. Cash outflows for
10
<PAGE>
investing activities were primarily for fixed assets that should continue, but
not at this rate, during the next twelve months as the Company's business
increases. Funds were provided from financing activities including proceeds from
stock transactions of $806,000 during the nine months ended September 30, 2000.
Our SB-2 registration statement was declared effective by the SEC on September
28, 2000 which registration is a prerequisite to the May 19, 2000 Investment
Agreement with Swartz Private Equity, LLC for a maximum of $25 million. The
agreement is for a period of three years from the effective date of the
registration statement, September 28, 2000. The Company has not yet presented
its first put against this equity line.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Registrant is a Small business issuer as defined by these Regulations and need
not provide the information required by this Item 3.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company is a defendant in a lawsuit filed on November 5, 1999 in the Circuit
Court of the Eleventh Judicial Circuit in and for Miami-Dade County, Florida,
Case Number 99-26073 CA 10. The plaintiff, Joseph Maenza, is seeking to collect
payment of a promissory note in the principal amount of $50,000 plus interest
from February 1999 and attorney fees. The Company filed an Answer and
Affirmative Defenses. On August 3, 2000 this case was dismissed without
prejudice. A Second Amended Complaint was filed August 24, 2000 to which the
Company again filed its Answer and Affirmative Defenses alleging, among other
issues, that the interest stated in the promissory note is usurious.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
COMMON STOCK
On May 19, 2000, the Company entered into an Investment Agreement with Swartz
Private Equity, LLC. The Investment Agreement entitles the Company to issue and
sell its common stock to Swartz for up to an aggregate of $25 million from time
to time during the three-year period following the date of the effective date of
the SB-2 registration statement, September 28, 2000. In order to comply with the
requirements of the Swartz agreement, on July 17, 2000 the Company passed a
resolution to amended its Articles of Incorporation to increase the authorized
number of common stock from 25,000,000 to 75,000,000.
Please see "Swartz Agreement" attached as Exhibit 4.1 to the SB-2 which exhibit
is incorporated by reference herein.
WARRANTS
Please see "Form of Commitment Warrants to Swartz" attached as Exhibit 4.2 to
the SB-2; "Form of Purchase Warrants to Swartz" attached as Exhibit 4.3 to the
SB-2; "Warrant Side Agreement with Swartz" attached as Exhibit 4.4 to the SB-2
all of which Exhibits are incorporated by reference herein.
PREFERRED STOCK
Our articles of incorporation authorize us to issue up to 10,000,000 shares of
Preferred stock, par value $.001 per share. Of these authorized 10,000,000
preferred shares, 5,000,000 have been classified as Series A Convertible
Preferred Stock with voting and liquidation privileges of which 3,000,000 have
been issued to Investment Management of America, Inc. in exchange for 3,000,000
shares of Common Stock owned by Investment Management of America, Inc. Each
share of Series A Convertible Preferred Stock is convertible into 1 share of
Common Stock at the option of the holder. Other than the 3,000,000 issued to
Investment Management of America, Inc. no other Preferred shares have been
issued.
USE OF PROCEEDS
The net proceeds from the sale of shares of Common Stock of the Company. to
Swartz Private Equity, LLC at a total gross aggregate price of up to twenty five
million dollars ($25,000,000) is intended to be used for the following purposes:
11
<PAGE>
o to fund anticipated operating losses, including sales and marketing
expenses;
o to purchase additional equipment and LED Display Boards and indoor
Illumisign-Eyecatcher display boards;
o for working capital and other general corporate purposes; and
o and to fund payment obligations for contemplated acquisitions and
corporate partnering arrangements.
We reserve the right to vary the use of proceeds among the categories listed
above because our ability to use the proceeds is dependent on a number of
factors, including the extent of market acceptance of our variety of display
boards, unexpected expenditures for further technical development, sales and
marketing efforts and the effects of competition.
From time to time we also expect to evaluate possible acquisitions of, or
investment in businesses and technologies that are complementary to our business
and technologies and may use net proceeds from the sale for such purposes. While
we consider potential investments or acquisitions from time to time, we have no
firm plans, commitments or agreements with respect to any such investment or
acquisitions.
Until we use the net proceeds as stated above, we will invest the funds in
investment grade, interest-bearing securities.
ITEM 3. DEFAULTS 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 (SECT. 249.308 OF THIS CHAPTER).
Financial Statements are incorporated in the body of this report.
No reports on Form 8-K have been filed during the quarter for which this report
is filed.
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.
Signed and submitted this _____ day of November 2000.
New Millennium Media International, Inc.
(Registrant)
By: /s/ John Thatch
----------------------------
John Thatch as President/CEO
12
