|-------------------------|
UNITED STATES | OMB |
SECURITIES AND EXCHANGE COMMISSION | APPROVAL |
Washington, D.C. 20549 |OMB Number:3235-0416 |
|Expires: May 31, 2000 |
FORM 10-QSB |Estimated average burden |
|hours per response:9708.0|
(Mark One) |-------------------------|
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended January 31, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT
For the transition period from_________ to ________
Commission File No. 0-10841
American Millennium Corporation, Inc.
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(Exact name of small business issuer as specified in its charter)
New Mexico 85-0273340
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1010 Tenth Street, Suite 100, Golden, CO 80401
----------------------------------------------
(Address of principal executive offices)
(303) 279-2002
---------------------------
(Issuer's telephone number)
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act during the past 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 [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:20,543,473 as of March 1,2000,
Transitional Small Business disclosure Format (check one): Yes [ ] No [X]
AMERICAN MILLENNIUM CORPORATION, INC.
FORM 10-QSB
INDEX
PAGE
Part I-Financial Information
Item 1-Financial Statements (unaudited)
Balance Sheet - January 31, 2000 (unaudited) ......................... ?
Statements of Operations - Six Months
Ended January 31, 2000 and 1999 (unaudited) ......................... ?
Statements of Cash Flows - Six Months ended
January 31, 2000 and 1999 (unaudited) ............................... ?
Notes to Financial Statements ........................................ ?
Item 2-Management's Discussion and Analysis or Plan of Operation ........... ?
Part II-Other Information
Item 6 -Exhibits and reports on Form 8-K ................................... ?
- -----------------------------------------------------------------------------
PART I - FINANCIAL INFORMATION
- -----------------------------------------------------------------------------
Item 1. Financial Statements
AMERICAN MILLENNIUM CORPORATION, INC.
BALANCE SHEET (Unaudited)
January 31, 2000
ASSETS
CURRENT ASSETS
Cash and cash equivalents ................................... $ 52,961
Accounts receivable, less allowance of $640 ................. 31,076
Inventory ................................................... 6,346
Prepaid expenses ............................................ 6,250
------------
TOTAL CURRENT ASSETS ...................................... 96,633
------------
PROPERTY AND EQUIPMENT, NET ................................... 45,468
------------
OTHER ASSETS
Available-for-sale equity security .......................... 14,390
Security deposits ........................................... 2,900
------------
TOTAL OTHER ASSETS ........................................ 17,290
------------
TOTAL ASSETS .................................................. $ 159,391
============
LIABILITIES AND DEFICIENCY IN ASSETS
CURRENT LIABILITIES
Accounts payable ............................................ $ 221,552
Accrued payroll and related taxes ........................... 289,073
Accrued expenses and other liabilities ...................... 323,830
Notes payable to officers, 6% annual interest ............... 63,486
Notes payable to related parties, 6% interest ............... 68,285
Notes payable to shareholders ............................... 12,000
Notes payable............................................... 136,500
Advances from officers ...................................... 33,165
------------
TOTAL CURRENT LIABILITIES ................................. 1,147,891
------------
COMMITMENTS AND CONTINGENCIES (NOTE 6)
DEFICIENCY IN ASSETS
Preferred stock, 10,000,000 shares authorized; none issued .... -
Common stock, $.001 par value, 60,000,000 shares authorized;
19,640,922 shares issued and outstanding .................... 17,794
Additional paid-in capital .................................... 11,427,080
Accumulated deficit ........................................... (12,444,726)
Accumulated other comprehensive income ........................ 11,350
------------
TOTAL DEFICIENCY IN ASSETS ................................ (988,500)
------------
TOTAL LIABILITIES AND DEFICIENCY IN ASSETS .................... $ 159,391
============
See accompanying notes.
AMERICAN MILLENNIUM CORPORATION, INC
STATEMENTS OF OPERATIONS (Unaudited)
For the Six Months Ended
January 31,
2000 1999
------------ ------------
REVENUES ....................................... $ 45,970 $ 85,594
COST OF REVENUES ............................... 43,769 13,475
------------ ------------
GROSS PROFIT ................................... 2,201 72,119
------------ ------------
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Consulting - officers and directors ............ 258,648 273,831
Depreciation........................... 4,600 6,848
Professional.................................. 41,863 89,142
Salaries ..................................... -- 15,220
Travel ....................................... 17,824 --
Other ........................................ 209,583 76,201
------------ ------------
TOTAL SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES .................. 532,518 461,242
------------ ------------
OTHER INCOME ................................... -- --
------------ ------------
LOSS FROM OPERATIONS BEFORE INCOME TAXES ....... (530,317) (389,123)
INCOME TAXES ................................... -- --
------------ ------------
NET LOSS ....................................... (530,317) (389,123)
============ ============
BASIC AND DILUTED NET LOSS PER COMMON SHARE .... (0.034) (0.03)
============ ============
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING (BASIC AND DILUTED) ....... 15,580,132 15,087,010
============ ============
See accompanying notes.
AMERICAN MILLENNIUM CORPORATION, INC
STATEMENTS OF CASH FLOWS (Unaudited)
For the Six Months Ended
January 31,
2000 1999
------------ ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) ....................................... $(530,316) $(389,123)
Adjustments to reconcile net (loss) to
net cash used provided by
operating activities:
Depreciation ................................... 5,600 6,848
Common stock exchanged for services ............ 33,000 --
(Increase) decrease in assets:
Accounts receivable ............................ (10,711) --
Inventory ...................................... (371) --
Prepaid expenses ............................... (6,250) --
Other Assets .............................. (1,649) --
Increase (decrease) in liabilities:
Accounts payable ............................... 56,302 (28,317)
Accrued payroll and related taxes .............. 199,165 --
Accrued expenses and other liabilities ......... 2,162 116,963
Net current liabilities of discontinued operations -- 113,229
--------- ---------
NET CASH USED BY OPERATING ACTIVITIES ........ (253,068) (297,363)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Disbursements
Acquisition of property and equipment ............ -- (3,000)
--------- ---------
DISBURSEMENTS FROM INVESTING ACTIVITIES ........ -- (3,000)
--------- ---------
NET CASH USED BY INVESTING ACTIVITIES ....... -- (3,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Receipts
Proceeds from loan activities ............... 127,500 --
Proceeds from others ......... -- 8,000
Proceeds from sale of common stock ............... 194,902 292,490
Proceeds from related parties, net................ 8,400 --
--------- ---------
RECEIPTS FROM FINANCING ACTIVITIES .............. 330,802 300,490
Disbursements
Advances to officers ............ (31,734) --
--------- ---------
DISBURSEMENTS FROM FINANCING ACTIVITIES ......... (31,734) --
--------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES ... 299,068 300,490
--------- ---------
NET (DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS ................................. 46,001 127
CASH AND CASH EQUIVALENTS - BEGINNING .............. 6,961 16,847
--------- ---------
CASH AND CASH EQUIVALENTS - ENDING ................. $ 52,962 $ 16,974
========= =========
SUPPLEMENTAL DISCLOSURES:
Interest paid ..................................... $ -- $ --
Income taxes paid ................................. $ -- $ --
Common stock issued in payment of prepaid
interest on note payable .......................... $ 6,250 $ --
See accompanying notes.
NOTE 1. GENERAL BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
General
The accompanying unaudited financial statements of the Company have been
prepared in accordance with Rule 10-01 of Regulation S-X promulgated by the
Securities and Exchange Commission and do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, the Company has made all
adjustments necessary for a fair presentation of the results of the interim
periods, and such adjustments consist of only normal recurring adjustments. The
results of operations for such interim periods are not necessarily indicative of
results of operations for a full year.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
NOTE 2. RECLASSIFICATIONS AND RESTATEMENTS
Amounts in the prior year financial statements have been reclassified for
comparative purposes to conform with the presentation of the current year
financial statements. Additionally, retroactive effect has been given to the
merger for purposes of comparative financial statement presentation.
NOTE 3. RELATED PARTY TRANSACTIONS
On January 12, 2000 the Company authorized the issuance of shares of its
restricted common stock to the following individuals in the amounts listed:
Bruce R. Bacon 750,000 shares; Renee C. Riegler 125,000 shares, Shirley H.
Harmon 37,500 shares; and Phyllis Watwood 287,500 shares; then rendered null and
void the January 26, 1999 Employee Incentive Plan, and no further restricted
common stock of the Company will be issued under the provisions of said Plan. On
January 12, 2000 the Company authorized the issuance of 900,000 shares of its
restricted stock to Andrew F. Cauthen, and upon the issuance of those shares, no
further stock and/or options for the company's common stock will be issued to
Andrew F. Cauthen under the Employment Contract as approved on August 13, 1999.
NOTE 4. COMMON STOCK
Other Stock Issuance
On September 10, 1999,the Company accepted an investment memorandum prepared by
Jack Augsback & Company for a private offering to be made in accordance with
the exemption from registration under Regulation D, Rule 506 of the Securities
Act of 1933.
On October 21, 1999, the Board of Directors authorized the issuance
of 350,000 shares of restricted common stock to five investors pursuant to this
offering. The Company received net proceeds of $79,510 from the sale of these
shares after issuance costs of $20,490.
On February 1, 2000, the Board of Directors authorized the issuance
of 100,000 shares of restricted common stock to one investor pursuant to this
offering. The Company received net proceeds of $22,220 from the sale of these
shares after issuance costs of $2,780.
On February 14, 2000, the Board of Directors authorized the issuance
of 500,000 shares of restricted common stock to two investors pursuant to this
offering. The Company received net proceeds of $100,922 from the sale of these
shares after issuance costs of $24,078.
On February 14, 2000, the Board of Directors authorized the issuance
of 868,001 shares of restricted common stock to eight investors pursuant to this
offering. The Company received net proceeds of $201,200 from the sale of these
shares after issuance costs of $15,800.
On February 25, 2000, the Board of Directors authorized the issuance of
553,000 shares of restricted common stock to six investors pursuant to this
offering. The Company received net proceeds of $112,325.25 from the sale of
these shares after issuance costs of $25,925.
Other Stock
On December 21, 1999 the Company authorized the cancellation of 150,000
shares of the common stock of the company and returned to the treasury. The
shares were issued in February 1999 for professional services to be rendered,
and it was determined that those services were not adequately provided, and the
Company and the service provider reached an agreement for the return of the
stock.
On December 21, 1999 the Company proposed a settlement regarding restricted
shares of the Company's common stock that were issued to two individuals in
August, 1997 as part of a Stock and Asset Purchase Agreement. Each individual
received 400,000 shares of restricted stock. The agreement was amended in
October, 1997 to reflect a lower valuation of the assets to be acquired in
exchange for the stock issued. Accordingly, it was necessary to reduce the
number of shares to which these two individuals were entitled to 117,275 shares
each. Under the terms of the Settlement Stipulation, each individual will return
the certificate for 400,000 shares and each will be issued a certificate for
117,275 unrestricted shares of common stock. The balance of 565,450 shares would
be canceled and returned to the treasury. On February 2, 2000 the following
transactions were authorized by the Company: Each individual is to receive
117,275 shares of unrestricted common stock in exchange for the return to the
Company of their certificate for 400,000 shares of common stock, a difference of
282,725 each, for a total of 565,450 returned to the treasury.
NOTE 5. OPERATING AND ECONOMIC CONDITIONS
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplates continuation of the
Company as a going concern. However, conditions have limited the ability of the
Company to market its products and services at amounts sufficient to recover its
operating and administrative costs. The Company has incurred operating losses of
$530,317 and $389,123 for the periods ending January 31, 2000 and 1999,
respectively. In addition, the Company has used substantial working capital in
its operations. As of January 31,2000, current liabilities exceed current
assets by $988,500.
Sales are expected to fund day-to-day operations and marketing activities
related to digital, wireless and wireline communications endeavors. Additional
capital is being raised by further issuance of the Company's common stock
through the private offering of stock under Regulation D, Rule 506.
The financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts or
classifications of liabilities that might be necessary in the event the Company
cannot continue in existence.
NOTE 6. COMMITMENTS AND CONTINGENCIES
Rents and Leases
The Company moved its executive offices to Golden, Colorado in December 1999.
Under the terms of a lease agreement dated December 8, 1999, between the Company
and Sucia Corporation, LLC, the Company is to occupy the Golden offices for a
term of 36 months beginning on the first day of December 1999 with a monthly
rent of $2,400.
On December 7, 1999, the Company announced that it is expanding its engineering
operations, which includes moving its present Denver office into a 2,417 square
foot office and engineering lab located in Golden, Colorado near Denver. The
Company will hire or outsource new positions including engineers,
technicians, and administrative personnel.
NOTE 7. SUBSEQUENT EVENTS
On February 25, 2000 the Company accepted the resignation of Renee Riegler
as Corporate Secretary effective February 29, 2000. A settlement of accrued
compensation and expenses was agreed by cash payment of $17,500 plus 100,000
shares of the restricted common stock of the Company.
On February 25, 2000 the Company appointed Shirley Harmon to the position
of Corporate Secretary.
Item 2. Management's Discussion and Analysis or Plan of Operations
SAFE HARBOR STATEMENT
Certain statements in this Form 10-QSB, including information set forth
under Item 2 - Management's Discussion and Analysis or Plan of Operations
constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 (the Act). American Millennium
Corporation, Inc. desires to avail itself of certain 'safe harbor' provisions of
the Act and is therefore including this special note to enable us to do so.
Forward-looking statements in this Form 10-QSB or hereafter included in other
publicly available documents filed with the Securities and Exchange Commission,
reports to our stockholders and other publicly available statements issued or
released by us involve known and unknown risks, uncertainties and other factors
which could cause our actual results, performance (financial or operating) or
achievements to differ from the future results, performance (financial or
operating) or achievements expressed or implied by such forward-looking
statements. Such future results are based upon management's best estimates based
upon current conditions and most recent results of operations.
Sales
During the six months ended January 31, 2000, sales decreased approximately
53% compared to the same period in 1999. The decline in sales is attributable to
the continued focus on development of specific product applications for the
broadest target market. The objective is to develop new products that grow
revenue and earnings in markets in which they compete. The Company is completing
a capitalization which we believe will allow for an increased sales and
marketing effort.
Cost of Sales
These costs increased approximately 325% in the six-month period ended
January 31, 2000, as compared to January 31, 1999.
Payroll, Payroll Taxes and Related Benefits
Payroll, payroll taxes, and related benefits declined in the six months
ended January 31, 2000, as compared to January 31, 1999. This is attributable to
the fact that the Company had two employees during the prior six months ended
January 31, 1999.
General and Administrative
There was an approximate 115% increase in other selling, general and
administrative expenses compared to the six-month period a year ago. The general
and administrative costs increased due to the Company's increase in staff and
operations.
Consulting and Professional
Consulting and professional fees decreased 46.96% from $89,142 to $41,863
for the six months ended January 31, 2000 and 1999, respectively.
Net Loss
The net loss was $530,317 or $.0340 per share as compared to $389,123, or
$.03 per share, for the six months ended January 31, 2000 and 1999 respectively.
Liquidity and Capital Resources
As a result of the net loss incurred, the Company has used substantial
working capital in its operations. As of January 31, 2000, current liabilities
exceeded current assets by $988,500.
Conditions have existed to limit the ability of the Company to market its
products and services at amounts sufficient to recover operating and
administrative costs.
The Company believes that a significant base of recurring revenues derived
from monthly satellite and paging monitoring charges will continue to build
value for the shareholders. The Company's principal marketing efforts are
directed toward the oil and gas, intermodal container, and railroad industries,
which have a need for monitoring of high value assets, with the majority of the
effort being directed toward the oil and gas industry. Marketing efforts are
performed by the Company's personnel and outside sales service providers. In
addition, the Company will continue marketing its products and services at
industry trade shows. The Company anticipates that during 2000 revenues are
expected to begin to accrue from the enrollment of subscribers based in its
various initiatives underway with oil and gas producers as well as manufacturers
of gas compressors and control panels for those compressors. The Company will
continue to market its services to those companies for deployment of its system
on a fleet basis in order to optimize upon subscriber enrollment. The Company
currently has over 150 satellite subscriber communicators (the industry term for
transceivers) deployed in field operations. These units are currently monitoring
a variety of assets both domestically and abroad.
The Company further believes that it will realize revenues from its
initiatives in other areas including the monitoring of railcars and intermodal
containers. Additionally, the Company anticipates other sources of revenue
unrelated to its reseller contract with ORBCOMM to begin as proprietary paging
technology developed by the Company is deployed. Also, the Company is presently
a value-added reseller for both American Mobile Satellite Corporation and
Weblink Wireless. Currently, the Company is enjoined to strict covenants of
non-disclosure and confidentiality regarding certain uses of technology
developed by the Company. Nevertheless, the Company will make appropriate public
disclosures pertaining to the aforementioned technologies when or if agreements
are reached with the parties involved.
- -----------------------------------------------------------------------------
PART II - OTHER INFORMATION
- -----------------------------------------------------------------------------
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(27) Financial Data Schedule
(b) Reports on Form 8-K - None
Pursuant to the requirement of Section 13 or 15(d) 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.
AMERICAN MILLENNIUM CORPORATION, INC.
DATED: March 15, 2000 By: /s/ Andrew F. Cauthen
Andrew F. Cauthen, President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
DATED: March 15, 2000 By: /s/ Andrew F. Cauthen
Andrew F. Cauthen, Director,
Chief Executive Officer, President
(Principal Executive Officer)
DATED: March 15, 2000 By: /s/ Bruce R. Bacon
Bruce R. Bacon, Director,
Vice President of Engineering,
Chief Technology Officer
DATED: March 15, 2000 By: /s/ Shirley M. Harmon
Shirley Harmon, Director,
Secretary
(Corporate Secretary)
DATED: March 15, 2000 By: /s/ James C. Statham
James C. Statham, Director,
Chief Operations Officer
DATED: March 15, 2000 By: /s/ Stephen F. Watwood
Stephen F. Watwood, Director,
Chairman of the Board, Vice
President of Business Development
DATED: March 15, 2000 By: /s/ Thomas W. Roberts
Thomas W. Roberts, Treasurer
(Principal Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY OF FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JANUARY 31, 2000, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUL-31-2000
<PERIOD-START> AUG-1-1999
<PERIOD-END> JAN-31-2000
<CASH> 52,961
<SECURITIES> 0
<RECEIVABLES> 31,716
<ALLOWANCES> 640
<INVENTORY> 6,346
<CURRENT-ASSETS> 96,633
<PP&E> 62,359
<DEPRECIATION> 16,891
<TOTAL-ASSETS> 159,391
<CURRENT-LIABILITIES> 1,147,891
<BONDS> 0
0
0
<COMMON> 17,794
<OTHER-SE> (1,006,294)
<TOTAL-LIABILITY-AND-EQUITY> 159,391
<SALES> 45,970
<TOTAL-REVENUES> 45,970
<CGS> 43,769
<TOTAL-COSTS> 43,769
<OTHER-EXPENSES> 532,518
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (530,317)
<INCOME-TAX> (0)
<INCOME-CONTINUING> (530,317)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (530,317)
<EPS-BASIC> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>
