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UNITED STATES OMB APPROVAL
SECURITIES AND EXCHANGE COMMISSION ------------------------
Washington, D.C. 20549 OMB Number: 3235-0416
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FORM 10-QSB Expires: April 30,2003
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Estimated average burden
hours per response: 32.0
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(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended January 31, 2003
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ______ to ______.
Commission File No. 0-10841
American Millennium Corporation, Inc.
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(Exact name of small business issuer as specified in its charter)
New Mexico 85-0273340
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(State or other jurisdiction of incorporation (IRS Employer Identification No.)
or organization)
110 North Rubey Drive, Suite 100A, Golden, CO 80403
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(Address of principal executive offices)
(303) 279-2002
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(Issuer's telephone number)
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(Former name, former address, and former fiscal year,
if changed since last report)
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS
Check whether the registrant 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 a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 45,281,977 at March 24, 2003.
Transitional Small Business disclosure Format (check one): Yes [ ] No [X]
AMERICAN MILLENNIUM CORPORATION, INC.
FORM 10-QSB
INDEX
PAGE
PART I-FINANCIAL INFORMATION
Item 1-Financial Statements (Unaudited)
Consolidated Balance Sheet - January 31, 2003 (Unaudited) 2
Consolidated Statements of Operations - Three months ended
January 31, 2003 and 2002 (Unaudited) 3
Consolidated Statements of Operations - Six months ended 4
January 31, 2003 and 2002 (Unaudited)
Consolidated Statements of Cash Flows - Six months ended
January 31, 2003 and 2002 (Unaudited) 4
Notes to Consolidated Financial Statements (Unaudited) 5
Item 2-Management's Discussion and Analysis or Plan of Operation 9
Item 3-Controls and Procedures 11
PART II-OTHER INFORMATION
Item 1 -Legal Proceedings 12
Item 2 -Changes in Securities 12
Item 3 -Defaults Upon Senior Securities 12
Item 4 -Submission of matters to a Vote of Securities Holders 12
Item 5 -Other Information 12
Item 6 -Exhibits and reports on Form 8-K 13
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PART I - FINANCIAL INFORMATION
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Item 1-Consolidated Financial Statements (Unaudited)
The consolidated financial statements in response to this item are as
follows:
AMERICAN MILLENNIUM CORPORATION, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET (Unaudited)
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January 31, 2003
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ASSETS
CURRENT ASSETS
Cash and cash equivalents ..........................$ 15,124
Accounts receivable, less allowance for doubtful
accounts of $17,289 ............................... 149,938
Inventories ........................................ 196,675
Employee advances .................................. 10,030
Prepaid expenses ................................... 2,802
Note receivable ................................... 67,000
Equipment deposits ................................. 1,626,250
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TOTAL CURRENT ASSETS ................................. 2,067,819
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PROPERTY AND EQUIPMENT, NET .......................... 83,489
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OTHER ASSETS
Securities in closely-held corporation ............. 3,040
Security deposits................................... 12,977
Other .............................................. 760
Deferred income tax asset, less valuation
allowance of $5,699,089 .......................... --
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TOTAL OTHER ASSETS ................................... 16,777
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TOTAL ASSETS .........................................$ 2,168,085
=============================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable - trade ............................$ 735,518
Accounts payable - related parties .................. 102,297
Accrued payroll and related taxes ................... 404,784
Other accrued liabilities ........................... 55,335
Accrued warranty .................................... 15,000
Current portion of capitalized lease obligations .... 2,017
Notes payable to related parties .................... 99,972
Notes payable to shareholders........................ 182,017
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TOTAL CURRENT LIABILITIES ............................. 1,596,940
LONG-TERM PORTION OF CAPITALIZED LEASE OBLIGATIONS..... 3,519
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TOTAL LIABILITIES .................................... 1,600,459
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STOCKHOLDERS' EQUITY
Preferred stock, $.001 par value, 10,000,000 shares
authorized; 1,000,000 issued and outstanding ..... 1,000
Common stock, $.001 par value, 60,000,000 shares
authorized; 45,281,977 issued and outstanding .... 45,282
Additional paid-in capital ......................... 20,753,610
Stock subscription receivable ...................... (115,000)
Accumulated deficit.................................(20,117,266)
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TOTAL STOCKHOLDERS' EQUITY ........................... 567,626
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ...........$ 2,168,085
=============================================================================
See accompanying notes.
2
AMERICAN MILLENNIUM CORPORATION, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
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For the Three Months Ended January 31, 2003 2002
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REVENUES..............................................$ 210,459 $ 136,742
COST OF REVENUES ..................................... 146,635 138,662
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GROSS PROFIT.......................................... 63,824 (1,920)
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SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Compensation to officers and directors ............. 138,750 121,375
Consulting - others ................................ 141,986 137,565
Professional ....................................... 69,206 8,248
Employee salaries .................................. 82,076 66,250
Employee benefits and payroll taxes ................ 23,201 31,108
Travel ............................................. 4,714 17,951
Telephone and utilities ............................ 9,066 7,853
Depreciation and amortization ...................... 7,595 12,272
Equipment and property rental ...................... 20,703 19,601
Bad debts........................................... -- 46,432
Computer and internet............................... 21,684 16,846
Other .............................................. 16,740 16,915
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TOTAL SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ... 535,721 502,416
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LOSS FROM OPERATIONS ................................. (471,897) (504,336)
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OTHER INCOME (EXPENSES)
Interest expense ................................... (3,641) (31,423)
Other miscellaneous income ......................... 350 183
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TOTAL OTHER INCOME (EXPENSES)......................... (3,291) (31,240)
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LOSS BEFORE INCOME TAXES ............................. (475,188) (535,576)
INCOME TAXES ......................................... -- --
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NET LOSS ............................................. (475,188) (535,576)
==============================================================================
BASIC AND DILUTED NET LOSS PER COMMON SHARE .......... $ (0.01) $ (0.02)
==============================================================================
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
(BASIC AND DILUTED) ................................. 45,023,825 27,556,504
==============================================================================
See accompanying notes.
3
AMERICAN MILLENNIUM CORPORATION, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
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For the Six Months Ended January 31, 2003 2002
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REVENUES..............................................$ 424,741 $ 380,398
COST OF REVENUES ..................................... 282,196 333,670
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GROSS PROFIT.......................................... 142,545 46,728
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SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Compensation to officers and directors ............. 277,500 259,625
Consulting - others ................................ 249,238 156,025
Professional ....................................... 119,684 22,766
Employee salaries .................................. 152,547 130,000
Employee benefits and payroll taxes ................ 49,663 60,497
Travel ............................................. 24,635 36,922
Telephone and utilities ............................ 19,161 15,304
Depreciation and amortization ...................... 15,191 50,236
Equipment and property rental ...................... 37,894 40,605
Bad debts........................................... 8,146 48,009
Computer and internet............................... 43,311 31,572
Other .............................................. 33,842 38,944
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TOTAL SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ... 1,030,812 890,505
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LOSS FROM OPERATIONS ................................. (888,297) (843,777)
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OTHER INCOME (EXPENSES)
Interest expense ................................... (75,133) (58,844)
Impairment of asset ................................ -- (20,417)
Other miscellaneous income ......................... 1,442 191
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TOTAL OTHER INCOME (EXPENSES)......................... (73,691) (79,070)
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LOSS BEFORE INCOME TAXES ............................. (961,988) (922,847)
INCOME TAXES ......................................... -- --
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NET LOSS ............................................. (961,988) (922,847)
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BASIC AND DILUTED NET LOSS PER COMMON SHARE .......... $ (0.02) $ (0.03)
==============================================================================
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
(BASIC AND DILUTED) ................................. 45,023,825 26,492,605
==============================================================================
See accompanying notes.
4
AMERICAN MILLENNIUM CORPORATION, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
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For the Six Months Ended January 31, 2003 2002
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) ........................................ $ (961,958) $ (922,847)
Adjustments to reconcile net (loss) to net
cash used by operating activities:
Depreciation and amortization ................. 15,190 50,236
Provision for bad debts ....................... -- 48,009
Common stock exchanged for services ........... 40,000 20,000
Write-down of impaired asset .................. -- 20,417
(Increase) decrease in assets:
Accounts receivable ........................... (35,166) (150,181)
Inventory ..................................... (95,270) (30,126)
Prepaid expenses .............................. (2,220) 8,022
Notes receivable .............................. 33,000 --
Other assets .................................. (13,739) 963
Increase (decrease) in liabilities:
Accounts payable .............................. 298,659 236,677
Accounts payable - related parties............. 30,646 --
Accrued payroll and related taxes ............. 194,436 68,996
Accrued liabilities ........................... (21,215) (50,694)
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NET CASH USED BY OPERATING ACTIVITIES ................. (517,637) (700,528)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Disbursements
Acquisition of property and equipment .............. (12,466) (3,105)
Equipment deposits ................................. (1,376,250) --
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DISBURSEMENTS FROM INVESTING ACTIVITIES ............... (1,388,716) (3,105)
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NET CASH USED BY INVESTING ACTIVITIES ................. (1,388,716) (3,105)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Receipts
Proceeds from note payable stockholder .............. 128,000 30,130
Proceeds from issuance of common stock, net ......... -- 675,000
Proceeds from issuance of preferred stock, net ...... 2,500,000 --
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RECEIPTS FROM FINANCING ACTIVITIES ..................... 2,628,000 705,130
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Disbursements
Payments on capitalized leases ...................... (1,904) --
Payments on notes payable to shareholders ........... (750,000) --
Payments on notes due related parties ............... (4,494) --
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DISBURSEMENTS FROM FINANCING ACTIVITIES ................ (756,398) --
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NET CASH PROVIDED BY FINANCING ACTIVITIES .............. 1,871,602 705,130
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NET DECREASE IN CASH AND CASH EQUIVALENTS .............. (34,751) 1,497
CASH AND CASH EQUIVALENTS - BEGINNING .................. 49,875 4,184
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CASH AND CASH EQUIVALENTS - ENDING .....................$ 15,124 $ 5,681
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SUPPLEMENTAL DISCLOSURES:
Cash paid during the period for:
Interest ..........................................$ -- $ --
Income taxes ......................................$ -- $ --
In addition to amounts reflected above, common
stock was issued:
In exchange for services ..........................$ 40,000 $ 20,000
================================================================================
See accompanying notes.
5
AMERICAN MILLENNIUM CORPORATION, INC. AND SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. GENERAL BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
General
The accompanying unaudited condensed financial statements of American Millennium
Corporation, Inc. (AMCI) have been prepared in accordance with accounting
principles generally accepted in the United States for interim information and
with the instructions to Form 10-QSB and Regulation S-B. Accordingly, they do
not include all of the information and footnotes required by accounting
principles generally accepted in the United States for complete financial
statements. In the opinion of management, all adjustments consisting of a normal
and recurring nature considered necessary for a fair presentation have been
included. Operating results for the three-month and nine-month period ended
January 31, 2003, may not necessarily be indicative of the results that may be
expected for the year ended July 31, 2003. ion of the results of the interim
periods, and such adjustments consist of only normal recurring adjustments. The
results of operations for such interim periods are not necessarily indicative of
results of operations for a full year.
Basis of consolidation
The accompanying consolidated financial statements include the accounts of
American Millennium Corporation, Inc. (AMCI) and its wholly-owned subsidiary,
AMCI International, Inc. (AMCI Int'l). All significant intercompany accounts and
transactions of American Millennium Corporation and Subsidiary (the Company) for
the years presented have been eliminated in consolidation.
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 amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
Basic and diluted net loss per common share
Basic net loss per common share is computed by dividing the net loss by the
weighted average number of common shares outstanding during each period.
Available stock options at January 31, 2003, to purchase 13,400,600 shares were
anti-dilutive and not considered common stock equivalents for purposes of
computing loss per common share. In periods where losses are reported, the
weighted average number of common shares outstanding excludes common stock
equivalents, because their inclusion would be anti-dilutive
Revenue Recognition
AMCI develops and sells satellite communication systems. Revenue from sales of
satellite communication systems is recorded at the time the goods are shipped or
access is granted to the service. The Company provides satellite airtime to its
customers on a month-to-month basis, which is recognized as revenue at the time
the service is provided.
6
NOTE 2. RECLASSIFICATIONS AND RESTATEMENTS
Amounts in the prior year financial statements have been reclassified for
comparative purposes to conform with the presentation of the current period
financial statements.
NOTE 3. RELATED PARTY TRANSACTIONS
On December 6, 2002, Jerry D. Kennett, a current 10% shareholder,
advanced the Company $128,000 in the form of a one-year unsecured
promissory note. The note provides for interest at the rate
of 12% per annum, payable annually. The note is payable to the Missouri
Cardiovascular Specialists Profit Sharing Plan FBO Jerry D. Kennett.
NOTE 4. COMMON STOCK
On November 4, 2002, the Board of Directors authorized the issuance of 500,000
shares of restricted common stock to Milestone Management Ltd., LLC, an investor
relations firm. The shares were issued in connection with a contract dated
November 7, 2002, in which Milestone Management would provide services related
to management consulting, strategic planning and corporate development.
NOTE 5. OPERATING AND ECONOMIC CONDITIONS
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplates continuation of the
Company as a going concern. However, conditions have limited the ability of the
Company to market its products and services at amounts sufficient to recover its
operating and administrative costs. The Company has continued to incur operating
losses ($961,958 for the six months ending January 31, 2003). As a result, the
Company has used substantial working capital in its operations. Because of these
factors, there is substantial doubt as to the Company's ability to continue as a
going concern.
The financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts or
classifications of liabilities that might be necessary in the event the Company
cannot continue in existence.
NOTE 6. SUBSEQUENT EVENTS
President and Chief Executive Officer Garrett L. Thomas resigned his positions
of officer and director of American Millennium Corporation, Inc. ("the Company")
effective February 19, 2003. The Board of Directors and Mr. Thomas mutually
agreed that based on the Company's desired business direction, a change in the
position of president and Chief Executive Officer would be in the best interest
of both the Company and Mr. Thomas.
As part of the settlement agreement reached with Mr. Thomas, the Company
assigned to Mr. Thomas the Purchase Agreement between the Company and Interlink
Logistics, Inc. dated June 28, 2002. Also, as part the settlement agreement, the
Company assigned to Mr. Thomas open accounts receivable due from Interlink
Logistics, Inc. in the amount of $105,064 in exchange for all accrued and unpaid
compensation, all unpaid reimbursable expenses due Mr. Thomas and the forfeiture
of all his stock compensation plans.
The Board of Directors decided to assign the Interlink contract to Mr. Thomas as
part of the settlement agreement because the Interlink contract was outside the
scope of our current business plan and the Board felt that Mr. Thomas would be
best able to support the contract on an individual basis. We will continue to
provide monthly engineering support for Interlink until an alternative solution
can be found.
On February 21, 2003, the Board of Directors approved and tendered an offer to
James Hamilton for the position of President and Chief Executive Officer
of the Company. On February 22, 2003 Mr. Hamilton accepted the offer.
7
On February 24, 2003, the Board of Directors granted to James E. Hamilton, the
Company's President and Chief Executive Officer the option to purchase 1,500,000
shares of the Company's restricted common stock for $.10 per share. The options
will vest in three equal increments as the Company's revenues reach $2,500,000,
$5,000,000 and $7,500,000. The options provide for a term of three years.
On February 24, 2003, the Board of Directors granted to Ronald J. Corsentino,
the Company's Chief Financial Officer and Controller the option to purchase
1,000,000 shares of the Company's restricted common stock for $.10 per share.
The options will vest in three equal increments as the Company's revenues reach
$2,500,000, $5,000,000 and $7,500,000. The options provide for a term of three
years.
On February 28, 2003, the Board of Directors issued 40,000 shares of Series A
Non-Voting Cumulative Preferred Stock to LISSEN, LLC, one of our current
shareholders. Holders of the Series A Preferred Stock are entitled to receive
cumulative dividends on each share of Series A Preferred Stock at an annual rate
of 12% of the original issued price per share, payable quarterly. Each share of
Series A Preferred stock is convertible into a number of shares of common stock
equal to the original issue price, divided by $.25. The Company received net
proceeds of $100,000 from the sale of the preferred stock.
On March 10, 2003, the Company received a commitment from LISSEN, LLC to
purchase an additional 200,000 shares of Series A Non-Voting Cumulative
Preferred Stock. The Company will receive the net proceeds of $500,000 on or
before March 20, 2003. LISSEN, LLC has also agreed to guarantee a letter of
credit for the Comapny in an amount not to exceed $500,000.
8
Item 2. Management's Discussion and Analysis or Plan of Operations
SAFE HARBOR STATEMENT
Certain statements in this section and elsewhere in this quarterly report on
Form 10-QSB are forward-looking in nature and relate to our plans, objecties,
estimates and goals. Words such as "expects," "anticipates," "intends," "plans,"
"projects," "forecasts," "believes," and "estiamtes," and variations of such
words and similar expressions, identify such forward-looking statements. Such
statements are made, pursuant to the safe harbor provisions of the private
securities litigation reform act of 1995 and speak only as of the date of this
report. The statements are based on current expectations, are inherently
uncertain, are subject to risks and uncertainties and should be viewed with
caution. Actual results and experience may differ materially from those
expressed or implied by the forward-looking statements as a result of many
factors, including, without limitatioin, those set forth under "business --
additional factors that may affect our business and future results" in our most
recent annual report on Form 10-KSB and under "risk factors." We make no
commitment to update any forward-looking statement or to disclose any facts,
events, or circumstances after the date hereof that may affect the accuracy of
any forward-looking statements.
OVERVIEW
We are an information management company specializing in the provision of
services for monitoring high value assets located in remote areas using
proprietary hardware and data management software and wireless communications.
Through the use of our satellite-based hardware and software, we are able to
provide these data communication services to areas in the United States and
abroad that do not have telephone or cellular access.
We currently provide information management services for the oil and gas
industry in North America. Our Sentry product line includes proprietary hardware
and sensors that are placed at a gas compressor site. SatAlarm, our back-end
server software, allows the end user to gather data and communicate directly
with the Sentry hardware via a secure website. The essential function of this
product line is to provide an alert when a gas compressor stops operating
allowing our customers field maintenance personnel the opportunity to quickly go
to the inoperative unit to try to resolve any problems with it.
We intend to provide similar products and services for the car telematics,
fleet management/tracking, asset tracking, and fixed asset monitoring markets
in South America.
RESULTS OF OPERATIONS
Revenue consists of hardware and airtime sales and custom development of
products for our customers. During the six months ended January 31, 2003,
revenues increased approximately 12% to $424,741 compared to the same period in
2002. This increase in year over year revenue was due to the fact that we
released our new Sentry hardware product, which is Class I, Division 2
certified, on October 14, 2002. We had several orders pending that certification
which lead to larger sales for this period.
Our cost of revenues decreased from $333,670 in 2002 to $282,196 in 2003, a
decrease of $51,474 or 15%. Gross profit for the six months ended January 31,
2003, was $142,545 (34% of sales) compared to $46,728 (12%) for the six months
ended January 31, 2002. This decrease in cost of revenues and increase in gross
profits primarily reflects less costs for testing and start up production costs
as we are realizing the benefits of streamlining our production and
manufacturing process. We expect our margins to increase as we gain economies of
scale by producing and selling more hardware and by growing our customer base of
residual airtime.
Payroll, payroll taxes, and related benefits increased by $11,713 in the six
months ended January 31, 2003, as compared to January 31, 2002. We have
maintained our current number of employees over the past year in an effort to
contain costs associated with payroll and related expenses. The total number of
employees as of January 31, 2003, is 12.
9
Consulting fees increased from $156,025 to $249,238 for the six months ended
January 31, 2002 and 2003, respectively. This is an increase of $93,213 or 60%.
The increase is due to the fact that we have engaged several consultants to
assist us in engineering consulting work, sales and marketing, capital formation
and developing the South American operations.
Professional fees increase from $22,766 to $119,684 for the six months ended
January 31, 2002 and 3002, respectively. This is an increase of $74,152 or 326%.
This increase is due to the fact that we had a large increase in legal and
accounting fees relating to SEC compliance work with regards to the Annual
Report on Form 10-KSB and the Proxy Statement on Schedule 14A.
Selling, general and administrative expenses principally consist of compensation
and related costs for personnel, fees for legal and other professional services
and depreciation of equipment and software used for general corporate purposes.
There was a $140,307 or 16% increase in total selling, general and
administrative expenses compared to the six month period a year ago. Selling,
general and administrative expenses for the six months ended January 31, 2003
and 2002, were $1,030,812 and $890,505, respectively. The increase is primarily
due to increased consulting and increased professional fees.
Other Income and Expenses. Other income (expenses) consisted of income from cash
equivalents and short term investments, less interest expense related to
financing obligations. Other income (expenses) for the six months ended January
31, 2003 and 2002, was ($73,691) and ($79,070), respectively. The increase in
interest expense is associated with a $750,000 short-term note that was advanced
to us on June 24, 2002. This note was paid in full on October 11, 2002. The
proceeds used to pay this note were from the sale of preferred stock detailed
above in Note 4 of the consolidated financial statements.
Net Loss. We had a net loss of $961,958 (or $0.02 per share) on revenues of
$424,741 for the six months ended January 31, 2003, compared to a net loss of
$922,847 (or $0.0 per share) on revenues of $380,398 for the period ended
January 31, 2002. The increase in net loss was primarily attributable to
increased consulting and professional fees, and an increase in interest
expense.
10
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Our current revenue consists of Sentry hardware sales and monthly airtime fees
for satellite airtime and the use of our SatAlarm software system. Our goal is
to acquire customers through hardware sales rendering residual income through
monthly airtime fees. Our current business plan provides for 500 hardware unit
sales per month until we reach a customer base of 6,000 units. At that level our
current business plan projects that we will be able to meet our monthly overhead
through current operating income. For the six months ended January 31, 2003, we
averaged sales of 50 hardware units per month and as of March 15, 2003, we had a
620-unit customer base providing residual airtime revenues. For the six months
ended January 31, 2003, 47% or our revenues were derived from hardware sales,
17% of our revenues were derived from recurring monthly charges for airtime and
use of our SatAlarm software system and the remainder of our revenues consisted
of engineering fees and software support fees relating to the Interlink
agreement.
As of March 15, 2003, based on current operations, we do not have sufficient
cash and liquid assets to satisfy our cash requirements on a monthly basis.
While we generate income from hardware sales and monthly airtime fees, these
proceeds are currently not sufficient to meet our current monthly overhead. We
will require approximately $1.5 million to cover our anticipated overhead and
operational needs for the fiscal year ending July 31, 2003. Revenues from
existing operations for the fiscal year ending July 31, 2003, are expected to
offset operation overhead by only approximately $1 million. While we have
projected revenues from our existing operations of approximately $1 million for
the fiscal year ending July 31, 2003, there is no guarantee these projections
will be achieved or that any revenue will be generated from these operations.
We will try to obtain additional financing through the sale of equity and/or
debt securities. If we are successful in completing an equity financing,
existing shareholders will experience dilution of their interest in us. In the
event we are not successful in raising sufficient additional financing, it is
anticipated that we will not be able to proceed with the business plan for the
further development and marketing of the Sentry and SatAlarm systems nor will we
be able to implement our South American operations. In addition, we may have to
limit our operations to an extent not presently determinable by management, but
which may include the sale of any assets owned or our ceasing to conduct
business. The availability of other sources of cash may, or may not, materialize
and thus, presents a significant risk that we will exhaust our financial
resources in the short term, with no ability to pay for ongoing operational
expenses, before our revenues can be developed to adequately cover our expenses.
Because of these factors, there is substantial doubt as to our ability to
continue as a going concern.
Item 3. Controls and Procedures
Evaluation of Disclosure Controls and Procedures. Our Chief Executive Officer
and Chief Financial Officer have reviewed and evaluated the effectiveness of our
disclosure controls and procedures (as defined in Exchange Act Rules
13a-14(c) and 240.15d-14(c)) as of a date within 90 days before the
filing date of this quarterly report. Based on that evaluation,
they have concluded that our current disclosure controls and procedures
are effective in timely providing the material information required
to be disclosed in the reports we file or submit under the Exchange Act.
Changes in Internal Controls. There have been no significant changes in our
internal controls or in other factors that could significantly affect internal
controls subsequent to the date we carried out this evaluation.
11
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PART II - OTHER INFORMATION
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Item 1. Legal Proceedings
As discussed in our Annual Report on Form 10-KSB for the fiscal year ended July
31, 2002, we are a party to certain pending legal proceedings. There were no
material developments in any such proceedings during the quarter ended January
31, 2003.
Item 2. Changes in Securities and Use of Proceeds
On November 4, 2002, the Board of Directors authorized the issuance of 500,000
shares of restricted common stock to Milestone Management Ltd., LLC, an investor
relations firm. The shares were issued in connection with a contract dated
November 7, 2002 in which Milestone Management would provide services related to
management consulting, strategic planning and corporate development.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Securities Holders
No matters were submitted to a vote.
Item 5. Other Information
None.
12
Item 6. Exhibits and Reports on Form 8-K
(A) Exhibits
3.1 Articles of Incorporation, as amended (incorporated by reference to
Exhibits 3(i), (ii), (iii) and (iv) to the Company's Amendment No. 3
to Registration Statement on Form SB-2 filed November 29, 2001)
3.2 Bylaws (incorporated by reference to Exhibit 3(v) to the Company's
Amendment No. 3 to Registration Statement on Form SB-2 filed
November 29, 2001)
4.1 Statement of Determiniation for Series A Non-Voting Cumulative Preferred
Stock (incorporated by reference to the Company's Current Report on
Form 8-K filed October 25, 2002)
4.2 Employee Stock Option Agreement dated February 23, 2003, between the
Company and James E. Hamilton
4.3 Employee Stock Option Agreement dated February 23, 2003, between the
Company and Ronald J. Corsentino
10.1 Agreement and Plan of Merger dated May 27, 1998, (incorporated by
reference to the Company's Current Report on Form 8-K filed June 11,
1998, File No. 000-10841-D)
10.2 Management Consulting Agreement dated November 2, 2002, with Milestone
Management Ltd., LLC
10.3 Promissory Note dated January 5, 2003 between American Millennium
Corporation, Inc. and the Missouri Cardiovascular Specialists Profit
Sharing Plan FBO Jerry D. Kennett
10.4 Resignation and Settlement Agreement, General Release and Covenant Not to
Sue dated February 19, 2003 between the Company and Garrett L. Thomas
(incorporated by reference to the Company's Current report on Form 8-K
filed February 23, 2003)
99.1 Certification of the Chief Executive Officer pursuant to 18 U.S.C.
Section 1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
99.2 Certification of the Chief Financial Officer pursuant to 18 U.S.C.
Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
(B) Reports on Form 8-K:
1) On February 24, 2003, a report on form 8-K was filed with the Securities
and Exchange Commission announcing that Garrett L. Thomas, the Company's
Chief Executive Officer and President resigned on February 19, 2003, and
James E. Hamilton was named the new Chief Executive Officer and
President effective February 22, 2003.
13
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
AMERICAN MILLENNIUM CORPORATION, INC.
Dated: March 24, 2003 By: /s/ James E. Hamilton
----------------------
James E. Hamilton
President and
Chief Executive Officer
Dated: March 24, 2003 By: /s/ Ronald J. Corsentino
------------------------
Ronald J. Corsentino
Treasurer, Secretary and
Chief Financial Officer
(Principal Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of this Registrant and
in the capacities and on the dates indicated.
Dated: March 24, 2003 By: /s/ Bruce R. Bacon
------------------
Bruce R. Bacon
Director
Vice President of Engineering
and Chief Technology Officer
Dated: March 24, 2003 By: /s/ Stephen F. Watwood
-----------------------
Stephen F. Watwood,
Director
Vice President of Business
Development
Dated: March 24, 2003 By: /s/ Shirley M. Harmon
----------------------
Shirley M. Harmon
Director
Dated: March 24, 2003 By: /s/ Andrew F. Cauthen
---------------------
Andrew F. Cauthen
Director
14
CERTIFICATIONS
I, James E. Hamilton, Chief Executive Officer, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of American
Millennium Corporation, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: March 24, 2003 /s/ James E. Hamilton
---------------------
James E. Hamilton
President and
Chief Executive Officer
15
I, Ronald J. Corsentino, Chief Financial Officer, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of American
Millennium Corporation, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14
and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: March 24, 2003 /s/ Ronald J. Corsentino
---------------------
Ronald J. Corsentino
Treasurer, Secretary and
Chief Financial Officer
(Principal Accounting Officer)
16