SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934 for the quarterly period ended June 30, 1997.
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the transition period from to .
------ ------
Commission file number: 0-20033
AMERIRESOURCE TECHNOLOGIES, INC.
--------------------------------
(Exact Name of Small Business Issuer as Specified in its Charter)
DELAWARE 84-1084784
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
8815 E. Long Street Lenexa, Kansas 66215
----------------------------------------
(Address if principle executive office) (Zip Code)
(913) 859-9292
--------------
(Issuer's telephone number)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months ( or 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
------ ------
The number of outstanding shares of the issuer's common stock, $0.0001
par value (the only class of voting stock), as of June 30, 1997 was 164,213,803.
<PAGE>
TABLE OF CONTENTS
PART I
ITEM 1. FINANCIAL STATEMENTS...................................................2
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS....................................4
PART II
ITEM 1. LEGAL PROCEEDINGS......................................................5
ITEM 6. REPORTS ON FORM 8-K....................................................5
SIGNATURES.....................................................................5
INDEX TO EXHIBITS..............................................................6
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2
<PAGE>
PART I
ITEM 1. FINANCIAL STATEMENTS
As used herein, the term "Company" refers to AmeriResource
Technologies, Inc., a Delaware corporation, and its subsidiaries and
predecessors unless otherwise indicated. Consolidated, unaudited, condensed
interim financial statements including a balance sheet for the Company as of the
quarter ended June 30, 1997, statement of operations, statement of shareholders
equity and statement of cash flows for the interim period up to the date of such
balance sheet and the comparable period of the preceding year are attached
hereto as Pages F-1 through F-6 and are incorporated herein by this reference.
[THIS SPACE HAS BEEN INTENTIONALLY LEFT BLANK]
3
<PAGE>
INDEX TO FINANCIAL STATEMENTS PAGE
- ----------------------------- ----
Unaudited Consolidated Condensed Balance Sheet, June 30, 1997................F-2
Unaudited Consolidated Condensed Statement of Operations,
for the six months ended June 30, 1997 and 1996............................F-4
Unaudited Consolidated Condensed Statement of Cash Flows,
for the six months ended June 30, 1997 and 1996............................F-5
Notes to Unaudited Consolidated Condensed Financial Statements,
June 30, 1997..............................................................F-6
F-1
<PAGE>
AMERIRESOURCE TECHNOLOGIES, INC. AND SUBSIDIARIES
Unaudited Consolidated Condensed Balance Sheet
June 30, 1997
ASSETS
- ------
Current Assets
Cash and cash equivalents $ 201
Receivables: -------------------
Trade 2,582,920
Related Party 14,471
Notes receivable-related party 332,904
Notes receivable-other 75,000
Other receivables 193,000
Allowance for doubtful accounts (583,857)
-------------------
Net receivables 2,614,438
-------------------
Prepaid insurance and other assets 50,367
-------------------
Total current assets 2,665,006
Property, Plant and Equipment-Net 196,584
Other Assets:
Marketable securities 4,750
-------------------
Total Assets $ 2,866,340
====================
See notes to unaudited condensed financial statements.
F-2
<PAGE>
AMERIRESOURCE TECHNOLOGIES, INC. AND SUBSIDIARIES
Unaudited Consolidated Condensed Balance Sheet
June 30, 1997
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current Liabilities
Accounts Payable:
Trade $ 637,516
Related Party 36,231
Current portion of long-term debt:
Related Party 491,276
Other 331,520
Accrued Payroll and related expenses 707,240
Accrued Interest:
Related Party 97,473
Other 77,760
Income Tax Payable 35,960
-----------------
Total Current Liabilities 2,414,976
Long-term Debt-Net of current portion 2,189,555
Commitments and contingencies 105,000
-----------------
Total Liabilities $ 4,709,531
STOCKHOLDERS' EQUITY
Preferred stock, $.001 par value, authorized
10,000,000 shares; Series A, issued and
outstanding 3,089,621 shares authorized 3,090
Common stock, $.001 par value, authorized 500,000,000
shares; issued and outstanding 164,213,803 shares 16,420
Additional paid-in capital 6,347,954
Common stock held in treasury; 3,600 shares at cost (5,625)
Accumulated deficit 8,205,030
-----------------
Total Stockholder' Equity $ (1,843,191)
-----------------
Total Liabilities and Stockholders' Equity $ 2,866,340
=================
See notes to unaudited condensed financial statements.
F-3
<PAGE>
AMERIRESOURCE TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Statement of Operations
For the six months ended June 30, 1997 and 1996
<TABLE>
<CAPTION>
For the three months ended For the six months ended
-------------------------- ------------------------
June 30 June 30 June 30 June 30
1997 1996 1997 1996
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net Service Income $ 44,143 $ 518,145 $ 44,143 $ 1,484,911
Operating expenses (63,556) (377,811) (63,566) (989,763)
General and administrative expenses (53,862) (637,726) (247,525) (1,430,539)
(Loss) or Gain from sold and closed
subsidiaries 0 109,982 0 109,982
Operating Loss (73,275) 0 (266,948) 0
Other Income (expense)
Interest Income 0 122 (23,133) (61)
Other Income 0 16,023 0 (30,547)
Interest Expense 11,564 47,551 (23,133) (91,815)
Net Loss (84,839) (418,816) (290,081) (886,616)
Net loss per common share 0 (0.01) 0 (0.01)
Weighted average common shares outstanding 162,963,803 132,636,448 162,963,803 132,636,448
</TABLE>
See notes to unaudited condensed financial statements.
F-4
<PAGE>
AMERIRESOURCE TECHNOLOGIES, INC. AND SUBSIDIARIES
Unaudited Consolidated Condensed Statement of Cash Flows
For the six months ended June 30, 1997 and 1996
For the six months ended
------------------------
June 30 June 30
1997 1996
(Unaudited) (Unaudited)
----------- -----------
Cash Flows from Operating Activities:
Net loss $ (290,081) $ (886,616)
----------- -----------
Non-Cash Items:
Depreciation and amortization $ 0 $ 100,460
Provision for bad debts 16,488 0
----------- -----------
Changes in Assets Affecting
Operations-Increase (Decrease):
Accounts receivable $ (950) $ 29,042
Other receivables (2,871) (9,597)
Work-in-process 83,401 143,087
Prepaid insurance and other expenses 104,868 7,395
Capital acquisition costs 0 0
Other assets 0 (225,050)
----------- -----------
Changes in Liabilities Affecting
Operations-Increase (Decrease):
Accounts payable $ 14,521 $ (45,394)
Accrued payroll and related expense 105,005 260,919
Accrued interest 46,257 (25,168)
Commitments and contingencies (80,652) (20,000)
Other current liabilities (91,508) (327,083)
----------- -----------
Net cash provided by (used in) operating
activities $ (95,522) $ (998,005)
----------- -----------
Cash Flows from Financing Activities:
Proceeds from issuance of debt $ 114,281 $ 379,628
Repayment of debt (26,894) 0
Proceeds from issuance of common stock 0 268,748
Capital contributions 0 353,400
----------- -----------
Net cash provided by financing activities $ 87,387 $ 1,001,776
----------- -----------
Net increase (decrease) in cash $ (8,135) $ 3,771
Cash and cash equivalents-beginning of
period 8,336 0
----------- -----------
Cash and cash equivalents-end of period $ 201 $ 3,771
=========== ===========
See notes to unaudited consolidated condensed financial statements
F-5
<PAGE>
AMERIRESOURCE TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Unaudited Consolidated Condensed Financial Statements
June 30, 1997
1. Summary of Significant Accounting Policies
The accompanying financial statements have been prepared in accordance
with the instructions of Form 10-QSB and do not include all of the information
and footnotes required by Generally Accepted Accounting Principles for complete
accounting statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for a fair presentation
have been included.
2. Corporations Included in the Consolidated Financial Statements
Name Location
----------------------------------- ----------------
KLH Engineers & Contractors, Inc. Closed
KLH Engineering of Colorado Springs, Inc. Closed
KLH Engineering of Lakewood, Inc. Closed
KLH Engineering of Grand Junction, Inc. Closed
KLH Engineering of San Mateo, Inc. Closed
KLH Engineering of Greeley, Inc. Closed
Tomahawk Construction Company, Inc. Lenexa, Kansas
3. Basis of Presentation and Principles of Consolidation
The consolidated financial statements include the combined accounts of
AmeriResource Technologies, Inc., Tomahawk Construction and the accounts of all
the closed subsidiaries. All material intercompany transactions have been
eliminated in consolidation.
4. Additional footnotes included by reference
Except as indicated in Notes above, there have been no other material
changes in the information disclosed in the notes to the financial statements
included in the Company's Annual Report on Form 10-KSB for the year ended
December 31, 1996. Therefore, those footnotes are included herein by reference.
See notes to unaudited consolidated condensed financial statements
F-6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATION
General
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The Company's primary line of business is currently being conducted
through Tomahawk Construction Company, a wholly owned subsidiary ("Tomahawk").
Tomahawk has traditionally focused its operations on a wide range of
construction projects as a qualified American Indian Minority Business
Enterprise. Tomahawk's construction projects have included utility work,
earthwork, structural concrete, bridge work, asphalt and concrete paving,
commercial buildings, pump stations and treatment plants.
Unfortunately, Tomahawk's ability to generate revenues has been
seriously stifled as a result of filing Chapter 11 Bankruptcy on September 15,
1994. Although Tomahawk emerged from Bankruptcy on August 25, 1995, it has been
unable to obtain any substantial construction contracts. Nonetheless, Tomahawk
continues to bid for new construction projects. (For more information on
Tomahawk's Bankruptcy proceedings, see the Company's Form 10-KSB for December
31, 1996.)
Liquidity and Capital Resources
- -------------------------------
The Company and its subsidiaries continue to have very restricted
liquidity. The Company has experienced severe financial difficulty as a result
of Bankruptcy proceedings involving its subsidiary Tomahawk. Although Tomahawk
emerged from Bankruptcy in August of 1995, Tomahawk's ability to obtain
construction projects has been severely limited as a result of those
proceedings.
In the interim, the Company will continue to utilize the resources of
its president Delmar Janovec until its plans begin generating revenues. Mr.
Janovec has advanced $419,197 to date to support the Company's limited
operations and has continued to work without pay since October 1, 1996. However,
there is no guarantee that Mr. Janovec will continue such support. The Company
will also utilize its common stock to compensate consultants, employees and
creditors when possible.
During the quarter ended June 30, 1997, the Company's working capital
deficit was approximately $250,030 a decrease of $3,672,447 from the same
quarter in 1996. This was caused by the construction subsidiary not having
contracts in place during the second quarter of 1997.
Net stockholders' equity in the Company declined from $982,874 at the
end of June 30, 1996 to a deficit of $1,843,191, as of June 30, 1997. The
Company's deficit is a result of the Company's inability to generate
construction revenues and the accumulation of debts in its inoperable
engineering subsidiaries prior to current managements involvement with the
Company.
Results of Operations
- ---------------------
The Company's operations for the second quarter consisted of bidding
for construction projects and formulating a plan of operation. The Company was
unsuccessful in its attempts to procure revenue construction projects during the
quarter.
Net service income for the quarter ended June 30, 1997, was $44,143 as
compared to $518,145 for the second quarter in 1996. Unfortunately, this is due
to Tomahawk's inability to procure any revenue construction projects.
Operating expenses decreased from $377,811 for the quarter ended June
30, 1996 to $63,556 for the quarter ended on June 30, 1997. The decrease is due
to lack of operations from its construction subsidiary.
4
<PAGE>
General, and administrative expenses were $53,862 for the quarter ended
on June 30, 1997 as compared to $$637,726 for the second quarter in 1996. The
decrease is due to no significant operations for 1997,
The Company's net loss went from $418,816 for the quarter ended June
30, 1996 to $84,839 for the quarter ended on June 30, 1997. This decrease is due
to the Company's efforts to eliminate unprofitable operations.
The management highly recommends reading this Form 10-QSB in
conjunction with the Company's Form 10-KSB for the year ended December 31, 1996,
in order to gain a more complete picture of the Company's financial condition.
PART II
ITEM 1. LEGAL PROCEEDINGS
Tomahawk filed suit against M.K. Ferguson for work completed in Oak
Ridge, Tennessee. The claim was settled in May 1997 for the sum of $1,851,444.
Tomahawk has agreed with its subcontractors to sharing a percentage of the delay
claim only, in exchange for releases of monies owed by Tomahawk. Tomahawk has
agreed to settle with USF&G, its bonding company, by paying to USF&G the sum of
$500,000 out of the settlement for a release of approximately $2,300,000 of Bond
Claims. In addition, Tomahawk has agreed to pay Industrial State Bank the sum of
$336,000 for a release of the Banks claims on the Settlement money. The
Settlement money will also pay to the IRS the sum of approximately $22,000 for a
release of all liens.
For additional information regarding the Company's legal proceeding,
see the Company's "Legal Proceedings" section in its Form 10-KSB for December
31, 1996.
ITEM 6. REPORTS ON FORM 8-K
The Company filed a Current Report on Form 8-K, April 8, 1997, regarding the
failure and inability to file timely annual report on Form 10-KSB, closure of
all Engineering Subsidiary's, resignation of Ed Blume, Chet Ellis, Alicia Ellis
and Richard White as directors of the Corporation.
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this Annual
Report on Form 10-QSB to be executed on its behalf by the undersigned, thereunto
duly authorized.
AMERIRESOURCE TECHNOLOGIES, INC.
/s/ Delmar Janovec November 13, 1998
-----------------------
Delmar Janovec
Chairman of the Board of Directors
and Chief Executive Officer
5
<PAGE>
INDEX TO EXHIBITS
Exhibits marked with an asterisk have been filed previously with the
Commission and are incorporated herein by reference.
EXHIBIT PAGE DESCRIPTION
NO. NO.
3.1 * Articles of Incorporation and Bylaws.
Incorporated by reference to the
Company's Form S-4 registration
statements, effective February 11, 1992.
File No. 33-44104.
6
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED
UNAUDITED CONDENSED FINANCIAL STATEMENTS FILED WITH THE COMPANY'S MARCH 31,
1997, QUARTERLY REPORT ON FORM 10-QSB AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U. S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<EXCHANGE-RATE> 1
<CASH> 201
<SECURITIES> 4,750
<RECEIVABLES> 2,614,438
<ALLOWANCES> 583,857
<INVENTORY> 0
<CURRENT-ASSETS> 2,866,340
<PP&E> 196,584
<DEPRECIATION> 50,824
<TOTAL-ASSETS> 2,866,340
<CURRENT-LIABILITIES> 2,414,976
<BONDS> 0
0
3,090
<COMMON> 16,420
<OTHER-SE> (1,843,191)
<TOTAL-LIABILITY-AND-EQUITY> 2,866,340
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 73,591
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (73,591)
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
