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 March 31, 2000
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 April 30, 2000: 55,237,007
<PAGE>2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ALTERNATIVE TECHNOLOGY RESOURCES, INC.
Condensed Balance Sheet
March 31, 2000
(Unaudited)
Assets
Current assets:
Cash $ 2,854,155
Accounts receivable, net 198,235
Prepaid annual service fee 250,000
Other current assets, including notes receivable
from employees and officers 58,384
-------------
Total current assets 3,360,774
Property and equipment:
Equipment 54,198
Accumulated depreciation and amortization (5,415)
-------------
Property and equipment, net 48,783
-------------
$ 3,409,557
=============
Liabilities and Stockholders' Deficit
Current liabilities:
Notes payable to stockholders $ 3,567,424
Notes payable to directors 22,743
Accounts payable to stockholders 535,292
Accounts payable 381,324
Accrued payroll and related expenses 155,521
Accrued preferred stock dividends 704,376
Other current liabilities 97,116
-------------
Total current liabilities 5,463,796
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 $1,929,378 1,225,002
Common stock, $0.01 par value - 100,000,000 shares
authorized, 55,224,507 shares issued and outstanding 552,245
Additional paid-in capital 35,838,230
Accumulated deficit (39,669,716)
-------------
Total stockholders' deficit (2,054,239)
-------------
$ 3,409,557
See accompanying notes to condensed financial statements.
<PAGE>3
ALTERNATIVE TECHNOLOGY RESOURCES, INC.
Condensed Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended March 31, Ended March 31,
--------------- ---------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Contract programming:
Contract programming revenue $ 543,133 $ 1,543,432 $ 2,188,410 $ 5,063,195
Contract termination fees - 16,110 5,453 16,110
Programmer costs (377,446) (1,077,778) (1,483,913) (3,640,597)
Start-up and other costs (36,104) (367,005) (393,074) (764,596)
------------ ------------ ------------- -------------
Contract programming gross profit 129,583 114,759 316,876 674,112
Product Development Costs (307,854) - (543,674) -
Selling, general and administrative (322,242) (315,094) (876,722) (957,439)
------------ ------------ ------------- -------------
Loss from operations (500,513) (200,335) (1,103,520) (283,327)
Other income (expense):
Interest income 23,588 - 42,495 -
Interest expense (173,457) (117,865) (2,792,114) (405,459)
------------ ------------ ------------- -------------
(149,869) (117,865) (2,749,619) (405,459)
------------ ------------ ------------- -------------
Net loss $ (650,382) $ (318,200) $ (3,853,139) $ (688,786)
============ ============ ============= =============
Preferred stock dividends in arrears (30,625) (30,625) (91,875) (91,875)
------------ ------------ -------------
Net loss applicable to
common stockholders $ (681,007) $ (348,825) $ (3,945,014) $ (780,661)
============ ============ ============= =============
Net loss per share $ (0.01) $ (0.01) $ (0.08) $ (0.03)
============ ============ ============= =============
Shares used in per share calculations 55,056,986 26,131,484 48,702,083 26,124,107
============ ============ ============= =============
</TABLE>
See accompanying notes to condensed financial statements.
<PAGE>4
ALTERNATIVE TECHNOLOGY RESOURCES, INC.
Condensed Statements of Cash Flows
(Unaudited)
Nine Months
Ended March 31,
---------------
2000 1999
---- ----
Net cash used in operating activities $ (1,247,688) $ (374,657)
------------- -----------
Cash flows from investing activities:
Purchase of property and equipment (54,198) -
------------- -----------
Cash flows from financing activities:
Proceeds from sale of common stock 3,712,346 -
Proceeds from exercise of options and warrants 120,584 -
Proceeds from notes payable to stockholders 342,834 1,079,150
Proceeds from notes payable to directors 2,780 2,770
Payments on notes payable to stockholders (33,500) (777,625)
Payments on notes payable to directors (21,646) -
------------- -----------
Net cash provided by financing activities 4,123,398 304,295
------------- -----------
Net increase (decrease) in cash 2,821,512 (70,362)
Cash at beginning of period 32,643 89,696
------------- -----------
Cash at end of period $ 2,854,155 $ 19,334
============= ===========
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
March 31, 2000
(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, consisting of normal recurring adjustments, considered
necessary to present fairly the Company's financial position at March 31, 2000,
results of operations for the three and nine month periods ended March 31, 2000
and 1999, and cash flows for the three and nine months ended March 31, 2000 and
1999. The results for the period ended March 31, 2000 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 until at least
quarter end March 31, 2001. However, considering, among other things, the
Company's historical operating losses, the expected substantial cost to develop
and 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 grow 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."
Since September 1999, the Company has received $1,150,347 in private sales of
its common stock at an average price of $3.08 per share, and in January 2000,
the Company received $2,561,999 in another private sale at an average price of
$3.59 per share.
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 (and if) it is developed, through the use of
Healtheon's WebMD Internet consumer portal. The agreement provides for start up
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. This $250,000 is an annual service fee to be amortized over a 12
month period beginning at the commencement of operations. 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 has provided additional documentation in support of its
position to the DOC. 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 whereby it recruited experienced, qualified computer programmers
primarily from the former Soviet Union, obtained necessary visas, and placed
them for assignment in the United States. ATR's computer programmer placement
business has not generated and currently is not generating 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 24 programmers as
of March 31, 2000.
In line with its business strategy to focus on the establishment of an Internet
medical provider network (IPN), the Company suspended recruitment for the
contract programming division in December 1999 and is pursuing the conversion of
individual programmer contracts to strategic partners, in those cases when the
end customer does not want to hire H-1B employees, or converting programmers to
be the end customer employees. In all cases the strategic partner or end
customer will apply for new H-1B visas for each programmer and upon approval the
programmers will be hired as their employees.
In August 1999, ATR decided to pursue the establishment of an IPN. The Company
plans to use current managements 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 consumers 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 WebMD Internet consumer portal. In
October 1999, the Company began its IPN development efforts and is currently
establishing satellite offices throughout the country to facilitate the
contracting of medical providers. No assurance can be given that the Company
will be able to develop and market an IPN, or if developed, that it will be
profitable.
<PAGE>8
PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis and Results of Operations
Results of Operation
Contract programming
Contract Programming Revenue. Contract programming revenue results primarily
from sales of programmer services. Revenue for the three and nine month periods
ended March 31, 2000 decreased $1,000,000 or 65% and $2,875,000 or 57%,
respectively, over the same periods of the previous year. This decrease is due
to a reduction in the average number of contract programmers working at customer
sites in the periods ended March 31, 2000, compared to the same periods in the
prior year. There was an average of 25 and 34 programmers at customer sites for
the three and nine month periods ended March 31, 2000 compared to 77 and 87 for
the same periods ended March 31, 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, for a fee, 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. This conversion process has been escalated by the Company during the
three month period ended March 31, 2000 to enable it to focus its business
strategy toward the Internet medical provider division, (see Overview above).
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 65% and 59% for the
three and nine month periods ended March 31, 2000 compared to the same periods
last year. This decrease is primarily due to the reduction in the number of
contract programmers working at customer sites as 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 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 decreased $331,000 and $372,000 in the three and nine
month periods ended March 31, 2000, as compared to the same periods in fiscal
1999. This decrease is due to a decrease in the number of programmers who were
in the United States but not working at customer sites, none during the third
quarter of fiscal 2000 compared to an average of 14 in the third quarter of
fiscal 1999 and 3 in the nine months ended March 31, 2000 compared to 7 in the
nine months ended March 31, 1999.
Contract Programming Gross Profit. The gross profit on contract programming
revenue was 24% and 14% for the three and nine month periods ended March 31,
2000, respectively, compared to 7% and 13% for the same periods in fiscal 1999.
Increase for the 3 month period is primarily due to start up and other costs
being a lower proportion of revenue in fiscal 2000 at 7% compared to fiscal 1999
at 24%. This is the result of the significant reduction of recruitment as of
December 31, 1999 (see Overview above).
Product Development Costs
In October 1999 the Company began its IPN product development costs. Costs
incurred consist of developing the network of healthcare providers.
Selling, General and Administrative Expenses
Selling, General and Administrative Expenses ("SG&A"). SG&A expenses for the
three month period ending March 31, 2000 shows an increase of $7,000 or 2%. The
nine month period shows a decrease of $81,000 or (8%) due primarily to a
decrease in non-cash employee compensation related to stock grants in fiscal
1999 to the Company's former Chief Executive Officer.
Other Income (Expense)
Interest Income. Interest income is related to short term investment of cash
balances and to notes receivable from employees and officers of the Company. No
such investments or notes receivable existed in fiscal 1999.
<PAGE>10
PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis and Results of Operations
Interest Expense. Interest expense increased $56,000 in the three months ended
March 31, 2000 primarily due to extending the maturity date on notes payable to
stockholders. Interest expense increased $2,387,000 in the nine months ended
March 31, 2000, compared to the same period in the prior fiscal year due to the
benefit accruing to the note holders of amending the conversion terms of the
$1,000,000 convertible note (see "Liquidity and Capital Resources").
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 will not be utilized prior to the
expiration of the carryover period.
Net Loss
Net loss increased $3,164,000 for the nine months ended March 31, 2000 compared
to the same period in fiscal 1999 primarily due to the increase in interest
expense, decrease in contract programming gross margin, and beginning IPN
development efforts.
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
March 31, 2000 and 1999, and $91,875 in each of the nine months ended March 31,
2000 and 1999, respectively) by the weighted average number of shares of common
stock outstanding during the periods 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 quarter end March 31, 2001. However, considering, among other things,
the Company's historical operating losses, the expected substantial cost to
<PAGE>11
PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis and Results of Operations
develop and 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 and fund the establishment of its IPN. Therefore, as discussed
further below, 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 $3,567,424 in the aggregate from two stockholders, Mr. James W.
Cameron, Jr., Chairman of the Board of the Company and Dr. Max Negri. These
notes bear interest at 10.25%. Effective January 1, 2000, Messrs. Cameron and
Negri extended the maturity date on all notes payable originally maturing
December 31, 1999, to the earlier of December 31, 2000, 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, 1999, 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 March 31, 2001, 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.
On April 21, 1997, the Company issued an unsecured note payable (the "Straight
Note") to Mr. 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 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
<PAGE>12
PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis and Results of Operations
resulting from the amendment to the conversion terms, as measured on August 19,
1999, was approximately $2.4 million and was 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 Chairman of the Board and Chief
Executive Officer (CEO). 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 February 2000 Mr. Cameron resigned as the Company's CEO and named Jeffrey S.
McCormick as his replacement. Mr. Cameron will remain active in the Company and
continue as Chairman of the Board.
Since September 1999, the Company has received $1,150,347 in private sales of
its common stock at an average price of $3.08 per share, and in January 2000,
the Company received $2,561,999 in another private sale at an average price of
$3.59 per share.
The Company has incurred operating losses since inception, which have resulted
in an accumulated deficit of $39,669,716 at March 31, 2000. The Company had a
working capital deficit and a stockholders' deficit of $2,054,239 each at March
31, 2000. Going forward, ATR's IPN development efforts will require substantial
funds prior to generating revenues. Therefore, ATR has engaged a New York based
financial and investment banking firm to assist the Company in raising $20 to
$40 million through the private placement of common stock. The actual price of
the common stock has yet to be determined. The placement is expected to close in
the second quarter of this calendar year, however, the timing of the placement
or ability to successfully complete at any level cannot be assured. If
successful the proceeds from the private placement will be used to develop the
Company's proposed IPN. The common stock to be issued in the proposed offering
will not be registered with the SEC and may not be offered or resold in the
United States without registration or an exemption from registration. 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
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.
<PAGE>13
PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis and Results of Operations
Effects of Inflation
Management does not expect inflation to have a material effect on the Company's
operating expense.
PART II. OTHER INFORMATION
Items 1, 2, 3, 4, 5
None
Item 6
(a) None
(b) Reports on 8-K
The Company filed a Form 8-K on February 17, 2000, announcing the engagement of
a New York based financial and investment banking firm to assist the Company in
a proposed private placement of common stock. If successful the proceeds from
the private placement will be used to develop the Company's proposed Internet
medical provider network.
<PAGE>14
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: May 9, 2000 /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 MARCH 31, 2000, FOR ALTERNATIVE TECHNOLOGY RESOURCES AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> Jun-30-2000
<PERIOD-END> Mar-31-2000
<CASH> 2,854,155
<SECURITIES> 0
<RECEIVABLES> 198,235
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,360,774
<PP&E> 54,198
<DEPRECIATION> 5,415
<TOTAL-ASSETS> 3,409,557
<CURRENT-LIABILITIES> 5,463,796
<BONDS> 0
0
1,225,002
<COMMON> 552,245
<OTHER-SE> (3,831,486)
<TOTAL-LIABILITY-AND-EQUITY> 3,409,557
<SALES> 0
<TOTAL-REVENUES> 2,193,863
<CGS> 0
<TOTAL-COSTS> 3,297,383
<OTHER-EXPENSES> 2,749,619
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,792,114
<INCOME-PRETAX> (3,853,139)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,853,139)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,853,139)
<EPS-BASIC> (.08)
<EPS-DILUTED> (.08)
</TABLE>
