U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[ X ] QUARTELY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quartely period ended December 31, 1999
COMMISSION FILE NO. 1-13134
AMERICAN NORTEL COMMUNICATIONS, INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
WYOMING 87-0507851
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
Incorporation or organization)
7201 EAST CAMELBACK ROAD, SUITE 320
SCOTTSDALE, AZ 85251
(Address of Principal Executive Office)
Issuer's Telephone Number: (480) 945-1266
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), and (2) has been subject to such filing
requirements for the past 90 days.
(1)Yes / X / No / /
(2)Yes / X / No / /
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registration filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by court.
Yes / / No / /
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the Registrant's classes of
common stock, as of the latest practicable date:
THERE WERE 15,403,785 SHARES OF THE REGISTRANT'S COMMON VOTING STOCK OUTSTANDING
ON FEBRUARY 15, 2000
<PAGE>
<TABLE>
<CAPTION>
AMERICAN NORTEL COMMUNICATIONS, INC.
COMPARATIVE BALANCE SHEETS
AS OF DECEMBER 31, 1999 and 1998
(UNAUDITED)
ASSETS
1999 1998
---------------- ----------------
<S> <C> <C>
CURRENT ASSETS:
Cash in Bank 410,305.77 $ 654,808.72
Prepaid Expenses 253,062.11 757,875.63
Intangible Debt Issue - 16,200.00
Accounts Receivable 3,561,597.02 1,873,816.82
Marketable Securities Available for Sale 3,123,068.75 -
---------------- ----------------
TOTAL CURRENT ASSETS $ 7,348,033.65 $ 3,302,701.17
PROPERTY AND EQUIPMENT:
Telecommunications Property 1,650.00 1,650.00
Equipment 33,665.77 33,665.77
Computer Equipment 43,349.23 38,271.01
Furniture and Fixtures 4,660.00 4,660.00
LESS: Accumulated Depreciation (39,582.00) (16,119.13)
---------------- ----------------
TOTAL PROPERTY AND EQUIPMENT 43,743.00 62,127.65
OTHER ASSETS:
Other Assets 6,666.94 6,666.94
Due from Affiliates 406,390.00 276,869.68
Deferred Tax Asset 1,160,000.00 -
---------------- ----------------
TOTAL OTHER ASSETS 1,573,056.94 283,536.62
---------------- ----------------
TOTAL ASSETS $ 8,964,833.59 3,648,365.44
================ ================
LIABILITIES
CURRENT LIABILITIES:
Trade Accounts Payable 826,807.42 1,349,146.21
Trade Accounts Payable - Other 362,189.00 439,327.00
Accrued Expenses 135,887.80 13,210.61
State Income Taxes Payable 255,000.00 -
Notes Payable 453,000.00 650,000.00
Accrued Interest Payable 49,416.25 409,989.00
Notes Payable Southwest Security 99,181.29 -
---------------- ----------------
TOTAL CURRENT LIABILITIES 2,181,481.76 2,861,672.82
LONG-TERM LIABILITIES:
Converted Debentures - 18,750.00
Unearned Revenues Marketable Securities 1,212,201.25 -
---------------- ----------------
TOTAL LONG-TERM LIABILITIES 1,212,201.25 18,750.00
---------------- ----------------
TOTAL LIABILITIES 3,393,683.01 2,880,422.82
STOCKHOLDERS' EQUITY
Common Stock 21,938,202.00 22,073,002.00
Treasury Stock (117,000.00) (270,000.00)
Additional Paid In Capital 50,595.00 -
Retained Earnings(Loss) (16,300,646.42) (21,035,059.38)
---------------- ----------------
TOTAL STOCKHOLDERS' EQUITY 5,571,150.58 767,942.62
---------------- ----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 8,964,833.59 3,648,365.44
================ ================
</TABLE>
See the accompanying notes to these unaudited financial statements
<PAGE>
<TABLE>
<CAPTION>
AMERICAN NORTEL COMMUNICATIONS, INC.
STATEMENTS OF CASH FLOWS
FOR THE PERIOD ENDED DECEMBER 31, 1999 AND PERIOD ENDED SEPTEMBER 30, 1999
(UNAUDITED)
2ND QTR 1ST QTR
--------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income $ 699,266.33 $1,396,650.25
Adjustments to reconcile net income to net cash provided by operating
activities.
Depreciation and amortization 3,600.00 3,600.00
Expenses paid with common stock - 27,000.00
Sale of common stock (11,505.77)
(Increase) decrease in:
Trade accounts receivable 94,271.38 (715,014.40)
Prepaid expenses 20,851.17 139,728.72
Increase (decrease) in:
Trade accounts payable (55,153.00) (647,314.58)
Accrued interest 4,005.00 5,411.31
State income taxes payable 65,000.00 80,000.00
Accrued payroll taxes 34,266.58 50,829.86
--------------- --------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 854,601.69 340,891.16
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of marketable equity securities (1,216,141.15) (140,000.00)
Advances to affiliates (30,000.00)
Purchases of property and equipment (5,078.22) -
--------------- --------------
NET CASH (USED) BY INVESTING ACTIVITIES (1,221,219.37) (170,000.00)
CASH FLOWS FROM FINANCING ACTIVITIES
Short-term installment loan 300,000.00
Short-term investment margin 99,181.29
Payment on notes payable (45,500.00) (465,500.00)
--------------- --------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 353,681.29 (465,500.00)
NET INCREASE (DECREASE) IN CASH (12,936.39) (294,608.84)
CASH AT BEGINNING OF PERIOD 423,242.16 717,851.00
--------------- --------------
CASH AT END OF PERIOD $ 410,305.77 $ 423,242.16
=============== ==============
</TABLE>
See the accompanying notes to these unaudited financial statements
<PAGE>
<TABLE>
<CAPTION>
AMERICAN NORTEL COMMUNICATIONS, INC.
COMPARATIVE STATEMENT OF OPERATIONS
FOR THE PERIOD ENDING DECEMBER 31, 1999 AND 1998
(UNAUDITED)
FISCAL YEAR 2000 FISCAL YEAR 1999
2ND QUARTER YEAR TO DATE 2ND QUARTER YEAR TO DATE
-------------- --------------- -------------- -------------
<S> <C> <C> <C> <C>
INCOME
Airtime Income $6,021,528.87 12,784,932.82 $4,152,601.58 7,257,826.89
COST OF SALES 4,746,569.66 9,341,875.63 2,925,874.00 5,180,814.12
-------------- --------------- -------------- -------------
GROSS PROFIT 1,274,959.21 3,443,057.19 1,226,727.58 2,077,012.77
SELLING EXPENSES 222,911.74 559,129.19 86,059.12 170,112.87
GENERAL & ADMINISTRATIVE 266,117.54 619,465.49 234,018.43 425,963.43
-------------- --------------- -------------- -------------
TOTAL EXPENSES 489,029.28 1,178,594.68 320,077.55 596,076.30
EARNINGS (LOSS) FROM OPERATIONS 785,929.93 2,264,462.51 906,650.03 1,480,936.47
OTHER INCOME (EXPENSE)
Other Income - 19,962.00 218.82 218.82
Interest Income 2,206.58 4,277.50 2,248.82 2,906.39
Interest Expense (23,870.18) (47,785.43) (13,500.00) (27,000.00)
-------------- --------------- -------------- -------------
TOTAL OTHER INCOME (21,663.60) (23,545.93) (11,032.36) (23,874.79)
NET INCOME BEFORE INCOME TAXES 764,266.33 2,240,916.58 895,617.67 1,457,061.68
Provisions for State Income Taxes 65,000.00 145,000.00 - -
-
NET INCOME (LOSS) $ 699,266.33 2,095,916.58 $ 895,617.67 1,457,061.68
============== =============== ============== =============
EARNINGS PER SHARE:
BASIC EARNINGS PER SHARE BEFORE INCOME TAXES $ 0.05 $ 0.06
-------------- ---------------
WEIGHTED AVERAGE NUMBER OF COMMON 15,403,785 14,381,606
-------------- ---------------
SHARES OUTSTANDING
BASIC EARNINGS PER SHARE $ 0.05 $ 0.06
-------------- ---------------
WEIGHTED AVERAGE NUMBER OF COMMON 15,403,785 14,381,606
-------------- ---------------
SHARES OUTSTANDING
DILUTED EARNINGS PER SHARE BEFORE INCOME TAXES $ 0.05 $ 0.06
-------------- ---------------
WEIGHTED AVERAGE NUMBER OF COMMON 15,403,785 14,387,450
-------------- ---------------
AND COMMON SHARE EQUIVALENTS OUTSTANDING
DILUTED EARNINGS PER SHARE $ 0.05 $ 0.06
-------------- ---------------
WEIGHTED AVERAGE NUMBER OF COMMON 15,403,785 14,387,450
-------------- ---------------
AND COMMON SHARE EQUIVALENTS OUTSTANDING
</TABLE>
See the accompanying notes to these unaudited financial statements
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies followed by the Company, and the methods of applying
those policies, which materially affect the determination of its financial
position, results of operations, or cash flows are summarized below:
UNAUDITED INFORMATION AND BASIS OF PRESENTATION
The balance sheet as of December 31, 1999 and statement of operation and cash
flows for all periods included in the accompanying financial statements have not
been audited. In the opinion of management these financial statements include
all normal and recurring adjustments necessary for a fair presentation of such
financial information. The results of operations for the interim periods are
not necessarily indicative on the results of operations to be expected for the
fiscal year.
The financial information included herein has been prepared pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
omitted pursuant to such rules and regulations. The interim financial
information and the notes thereto should be read in conjunction with the audited
financial statements for the fiscal year-ended June 30, 1999 which were included
in the Company's 10-KSB Annual Report to Stockholders.
ADVERTISING COSTS
Advertising production costs, except for costs associated with marketing are
charged to operations when incurred. Costs associated with marketing are
amortized based on management's forecasted analysis consistent with prior
marketing efforts.
CASH AND CASH EQUIVALENTS, SHORT AND LONG-TERM INVESTMENTS
All highly liquid instruments with an original maturity of three months or less
are considered cash equivalents, those with original maturities greater than
three months and current maturities less than twelve months from the balance
sheet date are considered short-term investments, and those with maturities
greater than twelve months from the balance sheet date are considered long-term
investments.
CONCENTRATION OF CREDIT RISK
The Company maintains its cash balances in two banks in Phoenix, Arizona.
Accounts at each institution are insured up to $100,000 by the Federal
Depository Insurance Corporation (FDIC). The Company maintains its investment
balances with two brokerage firms. Accounts at these firms are insured up to
$500,000 by the Security Investor Protection Corporation (SPIC).
<PAGE>
DEPRECIATION AND AMORTIZATION
Property and equipment are stated at cost and depreciated using the
straight-line method over the estimated useful lives of the assets, generally
five to seven years. The Company periodically evaluates the recoverability of
its long-lived assets based on expected undiscounted cash flows and recognizes
impairments, if any, based on expected discounted future cash flows.
REVENUE RECOGNITION
The Company's revenues are derived principally from long distance telephone
service. Revenue is recorded when service is rendered, which is recorded when a
long distance call is completed, and is recorded net of an allowance for
amounts, which the Company estimates will be refunded, rebated, uncollectable,
or not billable.
MARKETING COSTS
Direct response marketing costs, primarily incurred through contracted telephone
solicitation of prospective accounts, are deferred and amortized over the
average life of the new accounts, which is normally six to eight months.
INCOME TAXES
The provision for income taxes includes deferred income taxes resulting from
temporary differences in the recognition of certain income and expense items for
financial reporting purposes in different periods than for tax purposes.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amounts for cash, investments in marketable securities, trade
accounts receivable, advances to control group, accounts payable, disputed
claims, accrued liabilities, and notes payable approximate their fair value due
to the short maturity of these instruments. The Company has determined that the
recorded amounts approximate fair value.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, and disclosure of
contingent assets and liabilities at the date of the financial statements, and
the reported amounts of revenues and expenses during the reported period.
Actual results could differ from those estimates. Material estimates that are
particularly susceptible to significant change relate to the determination of
the collectability of receivables and advances, the valuation allowance for
deferred tax assets, and the amortization period for deferred marketing costs.
COMMON STOCK
Transactions in the Company's common stock issued for the acquisition of assets,
products or services are accounted for at fair value. Fair value is determined
based on the Company's traded closing price on the date of the transaction or
the fair value of the asset, product or service received, whichever fair value
is more readily determinable.
RECENT ACCOUNTING PRONOUNCEMENTS: NONE
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
NONE; NOT APPLICABLE.
ITEM 2. CHANGES IN SECURITIES.
NONE; NOT APPLICABLE.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
NONE; NOT APPLICABLE.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
NONE; NOT APPLICABLE.
ITEM 5. OTHER INFORMATION.
NONE; NOT APPLICABLE.
ITEM 6: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Certain statements in this report are forward looking statements that
involve risks and uncertainties. Among the factors that could cause actual
results to differ materially from those described in such forward looking
statements are the following: the Company's ability to manage rapid growth;
litigation; changes in regulations which change the costs to the Company of
conducting its business; competition in the long distance telecommunications
market, especially price competition; the Company's ongoing relationship with
its long distance carriers; dependence upon key personnel; subscriber attrition
and the Company's success in marketing its telecommunication services and
programs to new subscribers; the adoption of new, or changes in, accounting
policies, practices, and estimates and the application of such policies,
practices, and estimates; federal and state governmental regulation of the long
distance telecommunications industry; the Company's ability to develop its own
long distance network; the Company's ability to maintain, operate, and upgrade
its information systems; and the Company's success in offering additional
communications products and services.
In the quarter ended December 31, 1999, the Company provided long distance
service as a reseller. The Company has also implemented a strategy to target
markets that have high volumes of U.S. domestic calls and international calls.
International calling represents approximately 10% of the Company's revenues
during the quarter ended December 31, 1999. During the quarters ended September
30, 1999 and June 30, 1999, internationally calling represented approximately
10%.
Price competition in the U.S. domestic long distance market continued to be
intense during the quarter, and has had an adverse effect on the Company's
margins. Because the Company foresees no factors that are likely to lessen
price competition, during 1999 the Company began to target market groups that
make international calls, since the pricing pressures in international calling
are less intense at the present time than is the case with the domestic market.
The Company has also in recent period sought to offset the effects of price
competition by seeking investment opportunities in enterprises outside its
general industry group. At December 31, 1999, the Company held its securities
issued by the following:
<PAGE>
On July 21, 1999, the Company purchased for investment 1,000,000 shares of SHC
Corporation a/k/a Victor Maxx Technologies, Inc. SHC Corporation is an
OTC:Bulletin Board stock company whose common stock trades under the symbol
VMAX. This company specializing in short-term lending to consumers. The
acquisition price was $140,000, or 14 cents per share.
On October 22, 1999, the Company purchased for investment 19,400 shares of
American Educational Products Inc., the company is an OTC: Bulletin Board stock
company whose common stock shares trades under the symbol AMEP. The company
promotes and facilitates its products conducive to an environment that embraces
learning. The acquisition price was $210,467, or $10.75 per share.
On October 26, 1999, the Company purchased for investment 250,000 shares of
PTN Media a/k/a PTN Media, Inc., OTC: Bulletin Board stock company whose common
stock shares trades under the symbol PTNM. The company develops and markets
multi-media products. The acquisition price was $500,000, or $2.00 per share.
On November 15, 1999, the Company purchased for investment 1,211,111 shares of
MedCom USA, Inc., OTC: Bulletin Board stock company whose common stock shares
trades under the symbol EMED. The company markets online medical billing
services. The acquisition price was $500,000, or 45 cents per share.
Results of Operations
Quarter Ended December 31, 1999 Compared to Quarter Ended December 31, 1998.
Revenues for the quarter ended December 31, 1999 increased to $6,021,528,
or 45%, from $4,152,601 during quarter ended December 31, 1998. The increase in
revenue resulted primarily from growth in the volume of calls by subscribers
using the Company's basic 1 Plus and 800 long-distance service. The Company has
purchased new accounts and has increased the size of its customer base through
the use of outside telemarketers. The Company increased its market share in
large call volume areas, and has concentrated additional marketing resources on
international calling, which has higher profit margins than in the U.S. domestic
long distance market, and which is not currently being directly affected by the
intense pricing competition which exists in the domestic calling market during
the 1999 quarter. The Company is been better able to control subscriber
attrition ratios, which it attributes to better and more cost-effective service
to its customers.
Costs of sales was $4,746,570, or 78.8% of total revenues, for the quarter
ended December 31, 1999, compared to $2,925,874, 70.5% of total revenues, for
the same period in the prior year. Cost of sales is comprised principally of
the costs the Company pays to the long distance service providers whose long
distance networks the Company uses for its customers calls. The increased cost
was due primarily to the increased revenues. The increase as a percentage of
total revenues principally reflects the effects of price competition, which
narrows the spreads between the price at which the Company bills its customers
for long distance calls and the price that the Company pays for access to the
long distance calling networks owned by the carriers. The Company expects to
see the margins on customer revenues from U.S. domestic calls continue to
decrease as a result of continued pricing competition.
Selling expenses for the quarter ended December 31, 1999 increased to
$222,912, or 159%, from $86,059 during quarter ended December 31, 1998. The
increase in selling expenses was a result of telemarketing campaigns. The
Company increased its telemarketing campaigns and maintained the overall size of
its customer base. The size of the Company's customer base is materially
affected by price competition, which the Company believes is the principal
factor that affects the Company's customer attrition rates marketing campaigns
by competitors can have a significant effect on the attrition rate that the
Company experiences from time to time. The Company attempts to stage its
marketing campaigns to at least match new customer accounts with anticipated
attrition rates. However, unanticipated increases in the attrition rate can
<PAGE>
have a significant effect on the Company's revenues and expense levels during
any financial reporting period. The Company will generally respond to an
increase in the attrition rate by increasing its telemarketing campaigns, which
will increase selling expenses during the period which the campaign occurs. An
increase in the attrition rate will also have an adverse effect on revenues
because, when the increase in the attrition rate occurs, the Company ceases to
receive any revenue from those customers who switched to another long distance
carrier. Until those customers are replaced through telemarketing campaigns or
otherwise, the revenues that had been associated with their accounts will not be
received. Consequently, the effects of pricing competition can cause material
variations in the Company results of operations from period to period, and make
it unlikely that the Company will be able to sustain the level of earnings
achieved during recent quarterly periods.
General and administrative expenses for quarter ended December 31, 1999
increased 12% to $266,117 from $234,018 during quarter ended December 31, 1998.
The increase resulted from the Company increasing its customer service staffing
to provide better services to its customers. The Company has maintained the
number of its customer service representatives to provide bi-lingual assistance
to non-English speaking customers. The Local Exchange Carriers (LEC) have been
continually increasing the costs of wholesale traffic through its long distance
switching, and the Company anticipates that this trend will continue.
Interest expense for the quarter ended December 31, 1999 increased to
$23,870 from $13,500 during quarter ended December 31, 1998. The increase in
interest expense was a result of an increase in debt outstanding, which was
incurred in connection with the Company's acquisitions of AMEP, PTNM and EMED
common stock in October and November of 1999. The acquisitions were funded
through securing outside financing from First Star Financial.
Net earnings for the quarter ended December 31, 1999 were $699,266, or $.05
per diluted share, compared to $895,618, or $.06 per diluted share during
quarter ended December 31, 1998.
Liquidity
The Company has funded its working capital requirements primarily from cash
provided by operating activities. Net cash provided by operating activities for
the quarter ended December 31, 1999 is $854,602, compared to $340,891 during the
quarter ended September 30, 1999. The principle source of revenue is generated
from sales of long distance service to the Company's customers.
Capital Resources
Cash flows used by investing activities was $1,221,219 for the quarter
ended December 31, 1999. The Company purchased computer equipment for $5,078.
Additionally, the Company has purchased the following stock for investment:
<TABLE>
<CAPTION>
Date Purchased Symbol # Shares Cost Per Share
- -------------- --------- --------- ---------------
<C> <S> <C> <C>
04/23/99 DNTK 1,060,069 $ .53
07/21/99 VMAX 1,000,000 .14
10/22/99 AMEP* 19,400 10.75
10/26/99 PTNM* 250,000 2.00
11/15/99 EMED* 1,211,111 .45
<FN>
*The Company, for the quarter ended December 31, 1999 purchased for
investment 19,400 shares of common stock of American Educational Products, Inc.,
(AMEP), and purchased 250,000 shares of common stock of PTN Media, Inc., (PTNM),
and purchased 1,111,111 shares of common stock of MedCom USA, Inc., (EMED).
</TABLE>
<PAGE>
Cash flows provided for financing activities were $353,681 in the quarter
ended December 31, 1999. This cash inflow was attributed to an installment loan
obligation for $300,000, and for an investment interest margin of $99,181
secured for the purpose of investment in marketable securities. Also, the
Company has paid notes payable to unrelated third parties on terms negotiated
with note holders. During the quarter, the Company paid $45,500 under these
third party notes. The notes represent obligations incurred by prior management
in 1993, which were re-negotiated with pay off, default, and maturity provisions
more favorable to the Company than the original note terms.
ITEM 7. EXHIBITS
The exhibits filed as part of this report are as follows:
Exhibit 11
COMPUTATION OF EARNINGS PER SHARE
Exhibit 27:
FINANCIAL DATA SCHEDULE
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on behalf by the undersigned
thereunto duly authorized.
AMERICAN NORTEL COMMUNICATIONS, INC.
Date: February 11, 2000 by: /S/ W.P. Williams, Jr.
W.P. WILLIAMS, JR., Director
Chief Executive Officer
<PAGE>
<TABLE>
<CAPTION>
AMERICAN NORTEL COMMUNICATIONS, INC.
COMPUTATION OF EARNINGS PER SHARE
1999 1998
2ND QUARTER 2ND QUARTER
------------ -----------
<S> <C> <C>
BASIC EARNINGS PER SHARE: (NOTE 1)
Common shares outstanding, beginning of period 15,403,785 15,153,785
Effects of weighting shares:
Weighted common shares issued - (772,179)
------------ -----------
Weighted average number of common shares 15,403,785 14,381,606
============ ===========
outstanding
Net Income $ 699,266.33 895,617.67
============ ===========
Earnings Per Share 0.05 0.06
============ ===========
DILUTED EARNINGS PER SHARE: (NOTE 1)
Common shares outstanding, beginning of period 15,403,785 15,153,785
Effects of weighting shares:
Weighted common shares issued - (772,179)
10% convertible debentures - 5,844
------------ -----------
Weighted average number of common shares and
common equivalent shares outstanding 15,403,785 14,387,450
============ ===========
Net Income $ 699,266.33 895,617.67
============ ===========
Earnings Per Share $ 0.05 0.06
============ ===========
</TABLE>
NOTE 1:
- --------
Earnings per common share and common equivalent share are computed by
dividing net income by the weighted average number of shares of common stock and
common stock equivalents outstanding during the period. The Company's 10%
convertible debentures are considered to be common stock equivalents.
Consequently, the number of shares issuable, assuming full conversion
outstanding of these debentures as of the beginning of the fiscal year, is added
to the number of common shares. A fully diluted earnings per share is computed
assuming conversion of all debentures.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
American Nortel Communication, Inc. Form 10QSB Period Ending December 31, 1999
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 410306
<SECURITIES> 3123069
<RECEIVABLES> 3561597
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 7348034
<PP&E> 83325
<DEPRECIATION> 39582
<TOTAL-ASSETS> 8964834
<CURRENT-LIABILITIES> 2181482
<BONDS> 0
0
0
<COMMON> 21938202
<OTHER-SE> 50595
<TOTAL-LIABILITY-AND-EQUITY> 5571151
<SALES> 6021529
<TOTAL-REVENUES> 6021529
<CGS> 4746569
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 489029
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 23871
<INCOME-PRETAX> 764266
<INCOME-TAX> 65000
<INCOME-CONTINUING> 785929
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 699266
<EPS-BASIC> .05
<EPS-DILUTED> .05
</TABLE>
