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 the quarter ended September 30, 2000 Commission file number 000-30234
Millennium Plastics Corporation
------------------------------------
(Exact name of registrant as specified in its charter)
Nevada 88-0422242
-------- --------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6265 S. Stevenson Way
Las Vegas, Nevada 89120
------------------------ ---------
(Address of principal executive offices) (Zip Code)
(702) 454-2121
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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
As of September 30, 2000, there were 15,999,000 shares of common stock
outstanding.
An additional 12,000,000 shares were due the seller of Solplax Limited, but
unissued as of September 30, 2000.
<PAGE>
INDEX
PART I - FINANCIAL INFORMATION Page No.
Item 1. Financial Statements
Balance Sheet as of September 30, 2000 3
Statement of Shareholders' Equity
ending September 30, 2000 4-5
Statement of Operations
ending September 30, 2000 6
Statement of Cash Flows
ending September 30, 2000 7
Notes to Financial Statements
Ending September 30, 2000 8-9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operation 10
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults by the Company upon its
Senior Securities 11
Item 4. Submission of Matter to a Vote of
Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports of Form 8-K 12
SIGNATURES 13
<PAGE>
<TABLE>
MILLENNIUM PLASTICS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2000
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
September 30, 2000 March 31, 2000
Unaudited Audited
---------------------- ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 15,281 $ 585,854
Receivables 39,919 -
---------------- ---------------
TOTAL CURRENT ASSETS 55,200 585,854
PROPERTY AND EQUIPMENT
Equipment 48,634 1,005
Less: Accumulated Depreciation 29,692 201
----------------- --------------
NET PROPERTY AND EQUIPMENT 18,942 804
OTHER ASSETS
Intangible asset-patent, net of
accumulated
Amortization, 9/30/00-$7,596; 61,995 9,833,333
3/31/00-$166,667
Cost in excess of net assets of
acquired business
Net of accumulated amortization, 9,842,619 --
9/30/00-$32,919 --------------- --------------
TOTAL OTHER ASSETS 9,904,614 9,833,333
-------------------- ---------------
TOTAL ASSETS $ 9,978,756 $ 10,419,991
================== ===============
</TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<S> <C> <C>
CURRENT LIABILITIES
Accounts Payable $ 50,780 $ 154,138
Notes payable to individuals 39,310 --
Accrued Liabilities 5,517 7,672
--------------------- -----------------
TOTAL CURRENT LIABILITIES 95,607 161,810
--------------------- -----------------
Long-Term debt 32,275 --
---------------------- -----------------
STOCKHOLDERS' EQUITY
Common stock, $.001 par value;
50,000,000
Shares authorized; issued and
outstanding:
15,999,000 shares at 9-30-2000 15,999
23,900,000 shares at 3-31-2000 23,900
Common stock not issued at 9/30/00 but
owed to
Seller of acquired company, 12,000 --
12,000,000 shares
Paid in Capital 10,901,080 10,736,599
Deficit accumulated during the (1,078,205) (502,318)
development stage
--------------- ------------
TOTAL STOCKHOLDERS' EQUITY 9,850,874 10,258,181
--------------- -------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 9,978,756 $ 10,419,991
=================== =================
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE>
<TABLE>
MILLENIUM PLASTICS CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Common Stock
-------------------------------------------------
Not Issued
But Owed for
Acquired
Per Business
Share Shares Amount
----------- ------------ ---------- --------------
<S> <C> <C> <C> <C>
Inception-shares issued $0.001 17,000,000 $17,000 $ --
for marketing ----------- ---------- --------------
Net loss for the years -- -- --
ended March 31, 1987
Balance March 31, 1987 17,000,000 17,000 --
Activity to March 31, 1998 -- -- --
----------- ---------- --------------
Balance March 31, 1998 17,000,000 17,000 --
Activity to March 31, 1999 -- -- --
----------- ---------- ---------------
Balance March 31, 1999 17,000,000 17,000 --
Shares issued for services 0.050 100,000 100 --
Shares issued for
acquisition
of Graduated Plastics, 0.152 6,750,000 6,750 --
inc.
Shares contributed by a -- -- --
shareholder
Shares issued for patent 1.213 -- -- --
Shares issued for services 0.250 50,000 50 --
Net loss for the year ended -- -- --
March 31, 2000 ----------- ------------- ------------
Balance March 31, 2000 23,900,000 23,900 --
Unaudited after March
31,2000
Activity to September 30,
2000
Shares issued for 1.250 99,000 99 --
services
Shares unissued but owed to
seller of acquired -- -- 12,000
business
Shares cancelled by
agreement
to acquire Solplax Limited (8,000,000) (8,000) --
Net loss of six months -- -- --
ended September 30, 2000 -------------- ---------- -------------
Balance September 30, 2000 15,999,000 $ 15,999 $12,000
============== ========== ==============
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE>
<TABLE>
MILLENIUM PLASTICS CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(CONTINUED)
Paid In Treasury Deficit
Capital Stock Accumulated
During The
Development
Stage
------------ ------------ ---------------
<S> <C> <C> <C>
Inception-shares issued $ -- $ -- $ --
for marketing
Net loss for the years -- -- (17,000)
ended March 31, 1987 ------------ ------------ -------------
Balance March 31, 1987 -- -- (17,000)
Activity to March 31, 1998 -- -- --
----------- ------------- -------------
Balance March 31, 1998 -- -- (17,000)
Activity to March 31, 1999 -- -- --
----------- ------------- -------------
Balance March 31, 1999 -- -- (17,000)
Shares issued for services 4,900 -- --
Shares issued for
acquisition
of Graduated Plastics, 1,019,249 -- --
inc.
Shares contributed by a 8,000 (8,000) --
shareholder
Shares issued for patent 9,692,000 8,000 --
Shares issued for services 12,450 -- --
Net loss for the year -- -- (485,318)
ended March 31, 2000 ---------- --------------- -----------
Balance March 31, 2000 10,736,599 (502,318)
Unaudited after March
31,2000
Activity to September 30,
2000
Shares issued for services 123,651 -- --
Shares unissued but owed to
seller of acquired business 9,588,386 -- --
Shares cancelled by
agreement
to acquire Solplax Limited (9,547,556) -- --
Net loss of six months -- -- (575,887)
ended September 30, 2000 --------------- ------------ ------------
Balance September 30, 2000 $10,901,080 $ -- $(1,078,205)
=============== ========== ==============
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE>
<TABLE>
MILLENNIUM PLASTICS CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
UNAUDITED
Three Months Ended Six Months Ended From
September 30 September 30 Inception
April 2, 1986
to
September 30
---------------------- ------------------ ---------------
2000 1999 2000 1999 2000
<S> <C> <C> <C> <C> <C>
Revenues $ -- $ -- $ -- $ -- $ --
Amortization of 111,110 -- 277,777 -- 444,444
patent
Amortization of
cost in excess
of net
assets of 32,919 -- 32,919 -- 32,919
acquired
business
Wages 26,282 -- 55,791 -- 71,791
Professional 70,133 -- 113,164 -- 312,866
fees
Travel 24,427 -- 35,983 -- 88,166
Administrative 28,041 -- 68,917 -- 147,956
expense ------------ ----------- ----------- --------- ----------
Loss from (292,912) (584,551) (1,098,142)
operations -- --
Interest income 305 -- 8,664 -- 19,937
-------------- ---------- ------------ ---------- ---------
Net loss $(292,607) $ -- $(575,887) $ -- $(1,078,205)
========== ========== ========== ========== ============
Net loss per
share of common
stock-basic and $ (0.01) $ -- $ (0.02) $ -- $ (0.06)
diluted
========== ========== ========== ========== ===========
Weighted average 25,318,330 17,000,000 25,292,333 17,000,000 18,192,800
shares
outstanding
========== ========== ========== ========== ============
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE>
<TABLE>
MILLENNIUM PLASTICS CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
UNAUDITED
From Inception
Six Months Ended April 2, 1986
September 30 September 30
--------------------------- ------------
2000 1999 2000
--------------------------- ------------
<S> <C> <C> <C>
Cash flows from operating
activities:
Net Loss $ (575,887) $ - $ (1,078,205)
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation and 310,855 - 494,723
Amortization
Issuance of stock for 123,750 - 141,250
services
Changes in assets and
liabilities:
Accounts payable (142,077) - 12,061
Accrued liabilities (2,155) - 5,517
------------- ------------------ --------------
Cash used in operating (285,514) - (424,654)
activities ------------ ------------------ --------------
Investing activities:
Acquisition of Solplax (284,475) (284,475)
Limited
Purchase of equipment (584) - (1,589)
Cash used in investing (285,059) - (286,064)
activities
Financing activities:
Payments on acquired - - (300,000)
patent
Stock issued for - - 1,025,999
acquisition -------------- -------------- ----------------
Cash provided from financing - - 725,999
activities
Increase (decrease) in cash (570,573) - 15,281
and cash equivalents
Cash and cash equivalents, 585,854 - -
beginning ----------- ----------------- ---------------
Cash and cash equivalents, $ 15,281 $ - $ 15,281
ending ============= =============== ================
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE>
MILLENNIUM PLASTICS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 -Basis of Presentation
The accompanying unaudited condensed consolidated financial statements
at September 30, 2000 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 September 30, 2000 and results of operations and cash flows for the three
months and six months ended September 30, 2000. All such adjustments are of
a normal recurring nature. The results of operations for the interim period
are not necessarily indicative of the results to be expected for a full year.
Certain amounts in the 2000 financial statements have been reclassified to
conform to the 2001 presentations. The statements should be read in
conjunction with the financial statements and footnotes thereto included in
the Company's Form 10-KSB for the year ended March 31, 2000.
Note 2-Commitments and Contingencies
Going Concern
The accompanying unaudited condensed consolidated financial statements
at September 30, 2000 have been prepared in conformity with generally
accepted accounting principles which contemplate the continuance of the
Company as a going concern. The Company has suffered losses from operations
during its operating history. The Company is dependent on the testing of its
biodegradable plastics before it can begin commercial operations. The
Company's cash position may be inadequate to pay all of the costs associated
with the full range of testing required. Management intends to use
borrowings and security sales to mitigate the effects of its cash position,
however no assurance can be given that debt or equity financing, if and when
required, will be available. The unaudited condensed consolidated financial
statements do not include any adjustments relating to the recoverability and
classification of recorded assets and classification of liabilities that
might be necessary should the Company be unable to continue in existence.
Note 3- Stock Transactions
Pursuant to an agreement in December 1999, MPCO placed in escrow 120,000
shares of stock to be issued to a Company performing investment relations.
The agreement called for the immediate vesting of 36,000 shares and 7,000
shares each month for 12 month to be issued based on the performance of
services. At September 30, 2000 99,000 shares were earned and issued. The
services were assigned a value equal to $1.25 per share.
The Board of Directors approved a stock option plan on September 25,
2000. The total number of options that can be granted under the Plan will
not exceed 1,000,000 shares and will be priced at 85% of the fair market
value of the stock on the date of grant. Officers, directors and employees
are eligible for incentive stock options. Officers, directors, employees,
consultants and other service providers are eligible for nonqualified
options. The options have a maximum term of ten years.
Note 4 - Acquisition of Solplax Limited
On September 25, 2000, the Company acquired all of the outstanding
shares of stock of Solplax Limited (Solplax) in exchange for 12,000,000
shares of Company stock. The value assigned to the transaction was
$9,884,861 and consisted of the approximate fair market value of the shares
exchanged, an advance of $284,475 previously made to Solplax and the receipt
of a $250,386 receivable from Solplax held by the seller. In conjunction
with this transaction the seller returned 8,000,000 shares of the Company
that was subsequently cancelled and the Company returned the patent
<PAGE>
previously acquired from the seller. The patent is owned by Solplax. The
acquisition was recorded under the purchase method of accounting and,
therefore, the purchase price has been allocated to assets acquired and
liabilities assumed based on estimated fair values. The results of
operations from the date of acquisition will be included in the results of
the consolidated results of the Company from the acquisition date. There was
no significant activity from the date of acquisition to September 30, 2000.
The excess of the acquisition price over the value of the net assets
acquired has been recorded as goodwill and totaled $9,875,538. Goodwill and
other intangible assets are being amortized on a straight-line basis over
their useful lives, which range from 15 to 25 years.
The following unaudited pro forma data summarize the results of
operations for the periods indicated as if the Solplax acquisition had been
completed at the beginning of the period presented. These pro forma amounts
do not purport to be indicative of the results that would have actually been
obtained if the acquisition occurred as of the beginning of the periods
presented or that may be obtained in the future.
<TABLE>
From Inception
Six Months Ended April 2, 1986 to
September 30, 2000 September 30, 2000
<S> <C> <C>
Revenues $ --- $ ---
Net Loss 608,787 1,828,368
Earnings Per Share Basic and Diluted (.02) (.10)
</TABLE>
The shares that were not issued on the acquisition date have been
recorded in capital stock and paid in capital and are used in the earnings
per share calculations. The shares were issued on November 16, 2000.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The following discussion and analysis should be read in conjunction with
the Company's financial statements and the notes thereto contained elsewhere
in this filing.
Overview
Millennium Plastics Corporation ("Millennium" or the "Company") was
incorporated in the State of Nevada. Millennium, through its merger with
Graduated Plastics Corporation, acquired the United States patent rights to
new and innovative polymer and coating technology invented in 1995 by Solplax
Ltd. of Ireland. International patent attorneys in Europe and the United
States have confirmed that the patent is comprehensive and durable, having
been written by the developers of the technology and a scientific team with
specialization in PVA polymers. Independent evaluations carried out in
London, and Trinity College of Dublin have also endorsed these conclusions.
On September 25, 2000, the Company acquired all of the outstanding
shares of stock of Solplax Limited (Solplax) in exchange for 12,000,000
shares of Company stock.
The plastics which have been developed have the unique and very
marketable characteristic of dissolving in water and leaving only non-toxic
water and atmospheric gases. Public perception and governmental pressures for
plastics which are environmentally friendly are projected to propel the
commercial demand for this product.
Results of Operations for the six months ended September 30, 2000
The Company's net loss was $575,887 or $.02 per share for the six months
ended September 30, 2000. Revenues for the six months ended September 30,
2000 were non-existent, reflecting the Company's development stage of
operations.
General and administrative expenses were $551,632 for the six months
ended September 30, 2000, consisting of wages of $55,791, professional fees
of $113,164, travel expenses of $35,983, administrative expenses of $68,917,
and amortization of patent of $277,777. Total operating expenses from
continuing operations were $292,912 for the three months ended September 30,
2000.
Interest Income was $8,664 for the six months ended September 30, 2000.
Liquidity and Capital Reserves
As of September 30, 2000 (Unaudited)
As of September 30, 2000, the Company's assets were $9,978,756 and its
current liabilities were $95,607 resulting in an excess of assets of
$9,883,149. Cash was $15,281 at September 30, 2000.
<PAGE>
The Company has continued to fund its deficit cash flow from private
placements of the Company's common stock. It is anticipated that loans and
the sale of the Company's stock will continue until such time as the Company
generates sufficient revenues from its operations to cover operating
expenses.
Trends and Uncertainties
Demand for the Company's products will be dependent on, among other
things, the ability of the Company to establish a recognition in the
marketplace as to the existence of a biodegradable plastic with the
characteristics of Millennium's products.
Forward-Looking Statements and Associated Risks
This Quarterly Report on Form 10-QSB contains forward-looking statements
made pursuant to the safe harbor provisions of the Securities Litigation
Reform Act of 1995. These forward looking statements are based largely on
the Company's expectations and are subject to a number of risks and
uncertainties, many of which are beyond the Company's control, including, but
not limited to, economic, competitive and other factors affecting the
Company's operations, markets, products and services, expansion strategies
and other factors discussed elsewhere in this report and the documents filed
by the Company with the Securities and Exchange Commission. Actual results
could differ materially from these forward-looking statements. In light of
these risks and uncertainties, there can be no assurance that the forward-
looking information contained in this report will in fact prove accurate.
The Company does not undertake any obligation to revise these forward-looking
statements to reflect future events or circumstances.
PART II--OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 2. Changes in Securities.
On April 30, 2000 MPCO entered into an agreement with SCAC Holdings
Corp. (SCAC) to acquire all of the outstanding stock of Solplax Limited, a
wholly owned subsidiary of SCAC in exchange for 12,000,000 restricted shares
to SCAC. The 12,000,000 shares are subject to a registration rights
agreement and once registered with the SEC pursuant to the Securities Act of
1933, SCAC will distribute the shares to its stockholders as a dividend on a
pro-rata basis. The merger was consummated on September 25, 2000 and the
shares will be issued subsequent to September 30, 2000.
Item 3. Defaults by the Company upon its Senior Securities.
None.
<PAGE>
Item 4. Submission of Matter to a Vote of Security Holders.
On September 25, 2000 at the annual stockholders meeting, stockholders
approved the Acquisition Agreement between the Company and SCAC for the
acquisition of Solplax Limited, nominated and elected (5) directors, Paul
Branagan, James Arnold, Jocelyn Carnegie, William Lennon and Donato Grieco,
approved the 2000-2001 Stock Option Plan, reaffirmed Weaver & Martin as
independent auditors and approved the next meeting of stockholders to be held
in September, 2001.
Item 5. Other Information.
None
Item 6. Exhibits and Reports of Form 8-K.
None
<PAGE>
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.
MILLENNIUM PLASTICS CORPORATION
(Registrant)
By: /s/ Paul Branagan
------------------
Paul Branagan
President
Date: December 1, 2000
