U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended September 30, 1999
Commission file number: 0-20468
ALTERNATIVE TECHNOLOGY RESOURCES, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 68-0195770
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
629 J Street, Sacramento, CA 95814
(Address of principal executive offices)
(916) 231-0400
(Issuer's telephone number)
(Former address if changed since last report)
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 X No
Number of shares of common stock outstanding as of October 31, 1999: 54,245,726
<PAGE>2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ALTERNATIVE TECHNOLOGY RESOURCES, INC.
Condensed Balance Sheet
September 30, 1999
(Unaudited)
Assets
<TABLE>
<S> <C>
Current assets:
Cash $ 854,277
Accounts receivable, net 241,091
Other current assets, including notes receivable from employees and officers 89,156
--------------
Total current assets 1,184,524
$ 1,184,524
Liabilities and Stockholders' Deficit
Current liabilities:
Notes payable to stockholders 3,258,090
Notes payable to directors 42,539
Accounts payable to stockholders 624,773
Accounts payable 143,688
Accrued payroll and related expenses 193,042
Accrued preferred stock dividends 643,126
Other current liabilities 126,088
--------------
Total current liabilities 5,031,346
Commitments and contingencies
Stockholders' deficit:
Preferred stock, $6.00 par value - 1,200,000 shares authorized, 204,167
Series D shares issued and outstanding; liquidation
preference value of $1,868,128 1,225,002
Common stock, $0.01 par value - 100,000,000 shares
authorized, 54,214,110 shares issued and outstanding 542,141
Additional paid-in capital 32,897,244
Accumulated deficit (38,511,209)
--------------
Total stockholders' deficit (3,846,822)
$ 1,184,524
</TABLE>
See accompanying notes to condensed financial statements.
<PAGE>3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ALTERNATIVE TECHNOLOGY RESOURCES, INC.
Condensed Statements of Operations
(Unaudited)
<TABLE>
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Three Months
Ended September 30,
-------------------------------
1999 1998
-------- --------
Contract programming:
Contract programming revenue $ 944,651 $ 1,710,008
Contract termination fees 5,250 -
Programmer costs (652,063) (1,271,258)
Start-up and other costs (203,124) (158,523)
------------ ------------
Contract programming gross profit 94,714 280,227
Selling, general and administrative (276,944) (340,194)
------------ ------------
Loss from operations (182,230) (59,967)
Other income (expense):
Interest income from officers and directors 11,109 -
Interest expense to stockholders and directors (2,523,511) (111,828)
------------ ------------
(2,512,402) (111,828)
Net loss $(2,694,632) $ (171,795)
============ ============
Preferred stock dividends in arrears (30,625) (30,625)
------------ ------------
Net loss applicable to common stockholders $(2,725,257) $ (202,420)
============ ============
Basic and diluted net loss per share $ (0.07) $ (0.01)
============ ============
Shares used in per share calculations 36,818,746 26,120,499
============ ============
See accompanying notes to condensed financial statements.
</TABLE>
<PAGE>4
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ALTERNATIVE TECHNOLOGY RESOURCES, INC.
Condensed Statements of Cash Flows
(Unaudited)
<TABLE>
<S> <C> <C>
Three Months
Ended September 30,
-------------------------------
1999 1998
-------- --------
Net cash (used in) provided by operating activities $ (5,848) $ 1,669
Cash flows from financing activities:
Proceeds from sale of common stock 826,553 -
Proceeds from notes payable to stockholders 33,500 -
Payments on notes payable to stockholders (33,500) -
Proceeds from notes payable to directors 930 930
----------- ----------
Net cash provided by financing activities 827,483 930
----------- ----------
Net increase in cash 821,635 2,599
Cash at beginning of period 32,642 89,696
----------- ----------
Cash at end of period $ 854,277 $ 92,295
=========== ==========
</TABLE>
See accompanying notes to condensed financial statements.
<PAGE>5
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ALTERNATIVE TECHNOLOGY RESOURCES, INC.
Notes to Condensed Financial Statements
September 30, 1999
(Unaudited)
Note 1 - Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and pursuant to the rules and regulations of the Securities and
Exchange Commission. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. For further information, refer to the financial statements
and footnotes thereto included in the Company's annual report on Form 10-KSB for
the fiscal year ended June 30, 1999.
In the opinion of management, the unaudited condensed financial statements
contain all adjustments considered necessary to present fairly the Company's
financial position at September 30, 1999, results of operations for the three
month periods ended September 30, 1999 and 1998, and cash flows for the three
months ended September 30, 1999 and 1998. The results for the period ended
September 30, 1999 are not necessarily indicative of the results to be expected
for the entire fiscal year ending June 30, 2000.
The report of independent auditors on the Company's June 30, 1999, financial
statements includes an explanatory paragraph indicating there is substantial
doubt about the Company's ability to continue as a going concern. The financial
statements do not include any adjustments to reflect the uncertainties related
to the recoverability and classification of assets or the amounts and
classification of liabilities that may result from the inability of the Company
to continue as a going concern. Based on the steps the Company has taken to
refocus its operations, the Company believes that it has developed a viable plan
to address the Company's ability to continue as a going concern and that this
plan will enable the Company to continue as a going concern through the end of
fiscal year 2000. However, considering, among other things, the Company's
historical operating losses, the expected substantial cost to establish the
Company's Internet medical provider network (IPN) [see Part I, Item 2
"Management's Discussion and Analysis and Results of Operations -- Overview"],
and its history in the contract computer programming industry, there can be no
assurance that this plan will be successfully implemented. The Company does not
expect to generate positive cash flow from operations during fiscal 2000 or to
be able to pay off current obligations, fund the establishment of its IPN or
growth of its computer programmer business. Therefore, the Company contemplates
needing to raise additional financing during fiscal 2000, the receipt of which
cannot be assured.
<PAGE>6
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Note 2 - Financing Arrangements
See Part I, Item 2 "Management's Discussion and Analysis and Results of
Operations -- Liquidity and Capital Resources."
Note 3 - Healtheon Agreement
In September 1999 the Company entered into an agreement with Healtheon
Corporation to allow under insured and uninsured healthcare consumers to
register to use ATR's IPN, when it is developed, through the use of Healtheon's
Internet consumer portal. The agreement provides for development fees to
Healtheon estimated to cost $160,000. The agreement also requires payment to
Healtheon of $250,000 upon a promotional announcement of ATR's IPN program on
Healtheon's Internet portal, and a sharing of revenues when operational.
Operations are to begin no later than six months following acceptance of the
application software or the IPN has 100,000 primary care providers, whichever is
earlier. The agreement term is three years, but subject to modification or
withdrawal of services by Healtheon with certain financial penalties. In
addition, revenue sharing is subject to renegotiation on an annual basis based
on the date the program becomes operational.
On October 12, 1999, the Company and Healtheon received a letter from the
California Department of Corporations ("DOC") inquiring whether or not the
Company's proposed services, when offered to California consumers under the
agreement with Healtheon, may constitute a health care service plan requiring
the Company to be licensed with the DOC in California. The Company does not
believe that its proposed business services constitute a health care service
plan. The Company intends to meet with the DOC and will provide additional
documentation in support of its position. No assurance can be given that the DOC
will agree with the Company's position. If the DOC determines that the Company's
proposed business services constitute a health care service plan, the Company
will consider its options including licensing with the DOC or restructuring its
agreement with Healtheon.
<PAGE>7
PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis and Results of Operations
Management's Discussion and Analysis
The following discussion provides information to facilitate the understanding
and assessment of significant changes in trends related to the financial
condition of the Company and its results of operations. It should be read in
conjunction with the Company's financial statements and the notes thereto and
other financial information included elsewhere in the 10-KSB for the fiscal year
ended June 30, 1999.
Overview
Alternative Technology Resources, Inc. ("ATR" or the "Company"), a Delaware
corporation, was founded in 1989 to develop and sell computer integrated medical
laboratory information systems ("LIS"). The Company operated under the name 3Net
Systems, Inc. and was never successful in the LIS market. Therefore, in fiscal
1996, the Company stopped new system development and later decided to exit LIS
entirely.
During fiscal 1997, the Company changed its name to Alternative Technology
Resources, Inc. and focused its efforts on its computer programmer placement
business. ATR recruits experienced, qualified computer programmers primarily
from the former Soviet Union, obtains necessary visas, and places them for
assignment in the United States. ATR is also recruiting programmers from South
Korea for future placement. ATR's computer programmer placement business has not
generated sufficient cash flow to support operations. Further, there has been a
decline in contract programming revenues caused by the non-renewal of programmer
contracts from a high of 96 programmers at customer locations during fiscal year
1999 to 41 programmers as of September 30, 1999.
In August 1999, ATR decided to pursue the establishment of an Internet medical
provider network (IPN). The Company plans to use its experience in healthcare
and information technology to offer the nation's 600,000 plus medical providers
the ability to more directly link their practice via the Internet to parties
that pay for medical services. ATR is initially focusing on those who are under
insured and the 44 million Americans who are uninsured. In September 1999, the
Company entered into an agreement with Healtheon Corporation to allow under
insured and uninsured consumers to register to use ATR's IPN, when it is
developed, through the use of Healtheon's Internet consumer portal. In October
1999, the Company began its IPN development efforts. No assurance can be given
that the Company will be able to develop an IPN, or if developed, that it will
be profitable.
Year 2000 Issues
Management has made an assessment of its computer programs and has determined
that it has no Year 2000 impairment in its computer systems developed in-house
and is relying on vendor declarations that their systems and programs have no
impairment related to the Year 2000 issue. Therefore, management
<PAGE>8
PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis and Results of Operations
does not currently anticipate that the Company will incur significant operating
expenses or be required to invest heavily in computer systems improvements to be
Year 2000 compliant.
Results of Operation
Contract programming
Contract Programming Revenue. Contract programming revenue results primarily
from sales of programmer services. Revenues decreased $765,000 or 45% in the
quarter ended September 30, 1999, compared to the quarter ended September 30,
1998. This decrease is due to a reduction in the average number of contract
programmers working at customer sites in the quarter ended September 30, 1999,
compared to the quarter ended September 30, 1998. There was an average of 46
programmers at customer sites in the first quarter of fiscal 2000 compared to 95
in the first quarter of fiscal 1999. Two events in the last half of fiscal 1999
began to impact ATR's results of operations: customers moving toward utilizing
individual programmers or small (2 to 4 people) programming teams rather than
large programming teams, and several customers choosing to exercise a contract
termination provision which allowed them to convert ATR's programmers to their
employees. As a result, when contracts with several customers approached their
termination date, they were either not renewed, renewed for a fewer number of
programmers, or programmers converted to customer employees.
Contract Termination Fees. Contract termination fees are amounts received from
customers when they exercise the contract provision which allows them to convert
ATR's programmer to their employee. In addition, these fees can also be received
from programmers when they exercise their contract provision to terminate their
relationship with the Company prior to the termination date of their contract.
These fee amounts are stipulated in customer and programmer contracts, are based
on the length of time remaining under the contract, and are recognized as
revenue when such contract provisions are invoked. Although contract termination
fees are common in the industry, the number and frequency of exercises of the
"buy-out" provisions is unpredictable.
Programmer Costs. Programmer costs are the salary and other wage and benefit
costs of ATR's programmer employees. These costs decreased $619,000 or 49% for
the three months ended September 30, 1999, compared to the same period last
year. This decrease is primarily due to the reduction in the number of contract
programmers at customers discussed above in "Contract Programming Revenue."
Start-up and Other Costs. Start-up and other costs are the costs of recruiting,
training, and travel for programmer employees coming to the United States from
the Former Soviet Union for the first time, relocation costs within the United
States, and legal and other costs related to obtaining and maintaining
compliance with required visas, postings and notifications.
<PAGE>9
PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis and Results of Operations
Included in this category of costs is employee compensation paid by ATR whenever
programmer employees are hired and enter the United States or are relocated once
in the United States but before these programmers begin working at a customer's
work site. There are times when under immigration law, ATR, as employer, must
pay a programmer employee at least 95% of prevailing wages for his or her
specialty even when the programmer is not placed.
ATR expenses start-up and other costs as incurred, which results in timing
differences between the incurring of expense and recognition of resulting
revenue. Such differences may be particularly evident in ATR's case because of
its relatively small revenue base. The affect may be particularly noticeable
whenever the timing of placement of employees is such that the major start-up
costs occur late in one reporting period and the revenues appear in subsequent
periods.
Start-up and other costs increased $45,000 or 28% in the quarter ended September
30, 1999, as compared to the same quarter for the prior fiscal year. This
increase is primarily due to an increase in the number of programmers who were
not working at customer sites, an average of 5 during the first quarter of
fiscal 2000 compared to an average of 1 in the first quarter of fiscal 1999.
Contract Programming Gross Profit. The gross profit percentage was 10% for the
three months ended September 30, 1999, compared to 16% in the same quarter for
the prior fiscal year. This decrease is primarily due to the higher number of
programmers who were not working at customer sites.
Selling, General and Administrative Expenses
Selling, General and Administrative Expenses ("SG&A"). SG&A expenses decreased
$63,000 or 19% for the three months ended September 30, 1999 compared to the
same quarter for the prior fiscal year primarily due to a decrease in non-cash
employee compensation related to stock grants to the Company's former Chief
Executive Officer.
Other Income (Expense)
Interest Income. Interest income of $11,000 is related to notes receivable from
employees and officers of the Company.
Interest Expense. Interest expense increased $2,412,000 in the three months
ended September 30, 1999, compared to the same quarter for the prior fiscal year
due to the benefit accruing to the note holders of amending the conversion terms
of a $1,000,000 convertible note (see "Liquidity and Capital Resources").
<PAGE>10
PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis and Results of Operations
Income Taxes
As of June 30, 1999, the Company had a net operating loss carryforward for
federal and state income tax purposes of $25 million and $5 million,
respectively. The federal net operating loss carryforward expires in the years
2006 through 2018 and the state net operating loss carryforward expires in 1999
through 2004. The Company expects that annual limitations on the use of loss
carryforwards generated before September 13, 1993 will result in $4.1 million of
net operating loss carryovers which may not be utilized prior to the expiration
of the carryover period.
Net Loss
Net loss increased $2,523,000 for the three months ended September 30, 1999,
compared to the same quarter for the prior fiscal year due primarily to the
increase in interest expense.
Basic and Diluted Net Loss Per Share
The Company's net loss per share has been computed by dividing net loss after
deducting Preferred Stock dividends ($30,625 in each of the three months ended
September 30, 1999 and 1998) by the weighted average number of shares of common
stock outstanding during the quarters presented. Common stock issuable upon
conversion of Preferred Stock, common stock options and common stock warrants
have been excluded from the net loss per share calculations as their inclusion
would be anti-dilutive.
Liquidity and Capital Resources
The Company has used a combination of equity and debt financing and internal
cash flow to fund operations and finance accounts receivable but has incurred
operating losses since its inception.
As a result, the report of independent auditors on the Company's June 30, 1999,
financial statements includes an explanatory paragraph indicating there is
substantial doubt about the Company's ability to continue as a going concern.
The financial statements do not include any adjustments to reflect the
uncertainties related to the recoverability and classification of assets or the
amounts and classification of liabilities that may result from the inability of
the Company to continue as a going concern. Based on the steps the Company has
taken to refocus its operations, the Company believes that it has developed a
viable plan to address the Company's ability to continue as a going concern and
that this plan will enable the Company to continue as a going concern through
the end of fiscal year 2000. However, considering, among other things, the
Company's historical operating losses, the expected substantial cost to
establish the Company's IPN, and its history in the contract computer
programming industry, there can be no assurance that this plan will be
successfully implemented. The Company does not expect to generate positive cash
flow from operations during fiscal 2000 or to be able to pay off current
obligations, fund
<PAGE>11
PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis and Results of Operations
the establishment of its IPN or growth of its computer programming business.
Therefore, the Company contemplates needing to raise additional financing during
fiscal 2000, the receipt of which cannot be assured.
The Company has received short-term, unsecured financing in the form of notes
payable of $3,258,090 from two stockholders, Mr. James W. Cameron, Jr.
("Cameron") and Dr. Max Negri ("Negri"). These notes bear interest at 10.25%. In
December 1998, Messrs. Cameron and Negri extended the maturity date on all notes
payable originally maturing December 31, 1998, to the earlier of December 31,
1999, or such time as the Company obtains equity financing, in return for an
extension fee of 2% of the amounts extended. In addition, interest accrued on
these notes as of December 31, 1998, was included in the extended principal
amounts.
Although the Company has not entered into any written agreements with Messrs.
Cameron or Negri, management believes, based on discussions with these two
individuals, that they will continue to fund operations and extend the maturity
dates of the various notes payable until at least June 30, 2000, or until such
time as the Company can repay the notes. However, there can be no assurance that
events may arise which may affect these stockholders' ability to finance the
Company or that the Company may experience significant and unanticipated cash
flow problems which may cause these two stockholders to reconsider their
investment.
In September and October 1998, ATR submitted over 100 petitions for H1-B visas
to the U. S. Immigration and Naturalization Service (the "INS"). In December
1998, the Company received a request from the INS for more information
including: the size of ATR's offices, payroll information, corporate tax
information, and information about the Company's officers and directors. This
information was provided to the INS in late December 1998. In April 1999,
approximately 50 of the 100 visa petitions previously submitted were denied
based on what ATR believes is a misunderstanding by the INS of the facts
submitted in December 1998. Subsequently, additional information has been
provided to the INS by the Company; however, no further decisions have been made
by the INS.
ATR is aggressively working with its immigration attorney to bring to the
attention of the INS what it believes to be errors in the INS's analysis of the
Company and an inadequate understanding of the Company's business practices. As
this situation continues, the Company is not precluded from filing additional
H1-B visa petitions. It is ATR's intention to continue to file H1-B visa
petitions as it identifies programmer placement opportunities; however, in the
event the Company is unable to obtain additional H1-B visas, the Company's
operations and financial position could be adversely affected in fiscal year
2000.
On April 21, 1997, the Company issued an unsecured note payable (the "Straight
Note") to Cameron for $1,000,000 in accordance with the Reimbursement Agreement
the Company signed on February 28, 1994. Terms of the note provided for an
interest rate of 9.5% and monthly interest payments. No maturity date was stated
in the note; however, under the terms of the Reimbursement Agreement, upon
<PAGE>12
PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis and Results of Operations
written demand by Mr. Cameron, the Straight Note was to be replaced by a note
convertible into ATR's common stock (the "Convertible Note") in a principal
amount equal to the Straight Note and bearing interest at the same rate. The
conversion price of the Convertible Note was equal to 20% of the average trading
price of the Company's common stock over the period of ten trading days ending
on the trading day next preceding the date of issuance of such Convertible Note.
Subsequent to June 30, 1999, Mr. Cameron disposed of a portion of his interest
in the Straight Note, reducing the balance due him to $711,885, plus accrued
interest. On August 19, 1999, the Company's Board of Directors agreed with the
Straight Note holders to fix the conversion price of the Convertible Note to
$0.044 in exchange for the Straight and/or Convertible Notes ceasing to accrue
interest as of that date. Because of the decline in revenues caused by the
non-renewal of programmer contracts and the steady decline in the quoted value
of the Company's common stock at that time (trading price was at $0.25 on August
19, 1999), the Board agreed it was in the best interest of the Company to
eliminate the future market risk that the conversion price become lower than a
fixed conversion price of $0.044. The benefit accruing to the note holders
resulting from the amendment to the conversion terms, as measured on August 19,
1999, was approximately $2.4 million and has been recorded as additional
interest expense in the quarter ended September 30, 1999.
Subsequent to August 19, 1999, Mr. Cameron elected to replace his remaining
interest in the Straight Note, including accrued interest, with the Convertible
Note and then simultaneously converted the Convertible Note into 19,762,786
shares of ATR's common stock. All other Straight Note holders have since
replaced their Straight Notes, including accrued interest, with Convertible
Notes and converted such Convertible Notes into an aggregate of 7,998,411 shares
of the Company's common stock.
On August 26, 1999, Mr. Cameron, the Company's majority stockholder, joined the
Board of Directors and assumed the position of Chief Executive Officer. Under
Mr. Cameron's direction, ATR decided to pursue the establishment of an IPN (see
Part I, Item 1, "Note 3 - Healtheon Agreement" and Part I, Item 2, "Management's
Discussion and Analysis -- Overview").
In September 1999, the Company received $826,553 in a private sale of its common
stock at an average price of $2.84 per share, and in October 1999, the Company
received $121,174 in another private sale of its common stock at an average
price of $4.04 per share.
The Company has incurred operating losses since inception which have resulted in
an accumulated deficit of $38,511,209 at September 30, 1999. The Company had a
working capital deficit and a stockholders' deficit of $3,846,822 each at
September 30, 1999. Going forward, ATR's IPN development efforts will require
substantial funds prior to generating revenues. Therefore, ATR is pursuing
additional funds through private equity financing or additional debt financing.
Although there can be no assurance that additional financing can be obtained or
that if obtained such financing will be sufficient to prevent the Company from
having to materially reduce its level of operations or be forced to seek
protection under federal bankruptcy laws, management of ATR believes that
sufficient financing
<PAGE>13
PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis and Results of Operations
will be available until operations can be internally funded. Ultimately, ATR
will need to achieve a profitable level of operations to fund growth to meet its
obligations when they become due.
Effects of Inflation
The Company's most significant cost is programmer employees. To the extent these
personnel costs increase, management of the Company believes that customer
billing rates can be increased to cover such personnel increases.
<PAGE>14
PART II. OTHER INFORMATION
Items 1, 2, 3 and 4
None
Item 5.
As previously disclosed, in September 1999, the Company entered into an
agreement with Healtheon Corporation to allow under insured and uninsured
healthcare consumers to register to use ATR's IPN, when it is developed, through
the use of Healtheon's Internet consumer portal. The agreement provides for
development fees to Healtheon estimated to cost $160,000. The agreement also
requires payment to Healtheon of $250,000 upon a promotional announcement of
ATR's IPN program on Healtheon's Internet portal, and a sharing of revenues when
operational. Operations are to begin no later than six months following
acceptance of the application software or when the IPN has 100,000 primary care
providers, whichever is earlier. The agreement term is three years, but subject
to modification or withdrawal of services by Healtheon with certain financial
penalties. In addition, revenue sharing is subject to renegotiation on an annual
basis based on the date the program becomes operational.
On October 12, 1999, the Company and Healtheon received a letter from the
California Department of Corporations ("DOC") inquiring whether or not the
Company's proposed services, when offered to California consumers under the
agreement with Healtheon, may constitute a health care service plan requiring
the Company to be licensed with the DOC in California. The Company does not
believe that its proposed business services constitute a health care service
plan. The Company intends to meet with the DOC and will provide additional
documentation in support of its position. No assurance can be given that the DOC
will agree with the Company's position. If the DOC determines that the Company's
proposed business services constitute a health care service plan, the Company
will consider its options including licensing with the DOC or restructuring its
agreement with Healtheon.
Item 6. Exhibits and Reports on Form 8-K
(a) None
(b) Reports on 8-K
The Company filed a Form 8-K on August 27, 1999, announcing that James W.
Cameron, Jr., the Company's majority shareholder, had disposed of a portion of
his interest in a $1,000,000 straight note, that he and the other note holders
had elected to replace their interest in the straight notes with convertible
notes and simultaneously converted the convertible notes into the Company's
common stock. It was further announced that Mr. Cameron had joined the Board of
Directors, assumed the position of Chief Executive Officer and intended for the
Company to pursue the establishment of an Internet medical provider network.
<PAGE>15
PART II. OTHER INFORMATION
The Company filed a Form 8-K on September 28, 1999, filing a press release
announcing that the Company had signed an agreement with Healtheon Corporation
to allow uninsured and under insured consumers to register for the Company's
Internet medical provider network, when it is developed, through the use of
Healtheon's consumer portal.
<PAGE>16
SIGNATURES
In accordance with 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.
ALTERNATIVE TECHNOLOGY
RESOURCES, INC.
(Registrant)
Dated: November 9, 1999 /s/ JAMES W. CAMERON, JR.
--------------------------------------------
James W. Cameron, Jr.
Chief Executive Officer
(Principal Executive Officer)
Dated: November 9, 1999 /s/ EDWARD L. LAMMERDING
--------------------------------------------
Edward L. Lammerding
Chief Financial Officer
(Principal Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 10-QSB
FOR THE PERIOD ENDED SEPTEMBER 30, 1999, FOR ALTERNATIVE TECHNOLOGY RESOURCES
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Jun-30-2000
<PERIOD-END> Sep-30-1999
<CASH> 854,227
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<RECEIVABLES> 241,091
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1,225,002
<COMMON> 542,141
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<TOTAL-LIABILITY-AND-EQUITY> 1,184,524
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<NET-INCOME> (2,694,632)
<EPS-BASIC> (.07)
<EPS-DILUTED> (.07)
</TABLE>
