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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 October 31, 2002
[ ] 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)
1010 Tenth Street, Suite 100, Golden, CO 80401
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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 December 16, 2002.
Transitional Small Business disclosure Format (check one): Yes [ ] No [ ]
AMERICAN MILLENNIUM CORPORATION, INC.
FORM 10-QSB
INDEX
PAGE
PART I-FINANCIAL INFORMATION
Item 1-Financial Statements (Unaudited)
Consolidated Balance Sheet - October 31, 2002 (Unaudited) 2
Consolidated Statements of Operations - Three months ended
October 31, 2002 and 2001 (Unaudited) 3
Consolidated Statements of Cash Flows - Three months ended
October 31, 2002 and 2001 (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 13
Item 4 -Submission of matters to a Vote of Securities Holders 13
Item 5 -Other Information 13
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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October 31, 2002
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ASSETS
CURRENT ASSETS
Cash and cash equivalents ..........................$ 41,179
Accounts receivable, less allowance for doubtful
accounts of $29,720 ............................... 156,029
Inventories ........................................ 191,277
Employee advances .................................. 1,389
Prepaid expenses ................................... 389
Note receivable ................................... 67,000
Equipment deposits ................................. 1,626,250
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TOTAL CURRENT ASSETS ................................. 2,083,513
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PROPERTY AND EQUIPMENT, NET .......................... 78,618
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OTHER ASSETS
Securities in closely-held corporation ............. 3,040
Security deposits................................... 19,129
Other .............................................. 760
Deferred income tax asset, less valuation
allowance of $5,699,089 .......................... --
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TOTAL OTHER ASSETS ................................... 22,929
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TOTAL ASSETS .........................................$ 2,185,060
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable - trade ............................$ 498,591
Accounts payable - related parties .................. 106,237
Accrued payroll and related taxes ................... 279,254
Other accrued liabilities ........................... 118,877
Accrued Warranty .................................... 15,000
Current portion of capitalized lease obligations .... 2,982
Notes payable to related parties .................... 99,972
Notes payable to shareholder ........................ 56,287
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TOTAL CURRENT LIABILITIES ............................. 1,177,200
LONG-TERM PORTION OF CAPITALIZED LEASE OBLIGATIONS..... 3,518
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TOTAL LIABILITIES .................................... 1,180,718
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STOCKHOLDERS' EQUITY
Preferred stock, 10,000,000 shares authorized;
1,000,000 issued and outstanding ................. 1,000
Common stock, $.001 par value, 60,000,000 shares
authorized; 44,781,977 issued and outstanding .... 44,782
Additional paid-in capital ......................... 20,714,110
Stock subscription receivable ...................... (115,000)
Accumulated deficit.................................(19,640,550)
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TOTAL STOCKHOLDERS' EQUITY ........................... 1,004,342
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ...........$ 2,185,060
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See accompanying notes.
AMERICAN MILLENNIUM CORPORATION, INC. AND SUBSIDIARY
STATEMENTS OF OPERATIONS (Unaudited)
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For the Three Months Ended October 31, 2002 2001
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REVENUES..............................................$ 214,282 $ 254,646
COST OF REVENUES ..................................... 135,561 195,008
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GROSS PROFIT.......................................... 78,721 59,638
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SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Compensation to officers and directors ............. 138,750 138,250
Consulting - others ................................ 107,253 18,460
Professional ....................................... 50,478 14,518
Employee salaries .................................. 70,471 63,750
Employee benefits and payroll taxes ................ 26,462 29,390
Travel ............................................. 19,645 18,972
Telephone and utilities ............................ 9,062 7,454
Depreciation and amortization ...................... 7,595 37,964
Equipment and property rental ...................... 17,191 21,004
Bad debts........................................... 8,146 1,577
Computer and internet............................... 21,629 14,727
Other .............................................. 16,881 21,569
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TOTAL SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ... 493,563 387,635
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LOSS FROM OPERATIONS ................................. (414,842) (327,997)
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OTHER INCOME (EXPENSES)
Interest expense ................................... (71,492) (27,421)
Other miscellaneous income ......................... 1,092 7
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TOTAL OTHER INCOME (EXPENSES)......................... (70,400) (27,414)
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LOSS BEFORE INCOME TAXES ............................. (485,242) (355,411)
INCOME TAXES ......................................... -- --
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NET LOSS ............................................. (485,242) (355,411)
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BASIC AND DILUTED NET LOSS PER COMMON SHARE .......... $(0.011) $(0.014)
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WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
(BASIC AND DILUTED) ................................. 44,781,977 24,770,067
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See accompanying notes.
AMERICAN MILLENNIUM CORPORATION, INC. AND SUBSIDIARY
STATEMENTS OF CASH FLOWS (Unaudited) (Unaudited)
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For the Three Months Ended October 31, 2002 2001
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) ........................................ $ (485,242) $ (355,411)
Adjustments to reconcile net (loss) to net
cash used by operating activities:
Depreciation and amortization ................. 7,595 37,964
Provision for bad debts ....................... 8,146 13,044
(Increase) decrease in assets:
Accounts receivable ........................... (49,403) (194,823)
Inventory ..................................... (89,872) (29,129)
Prepaid expenses .............................. 194 6,881
Notes receivable .............................. 33,000 --
Other assets .................................. (11,250) --
Increase (decrease) in liabilities:
Bank overdraft ................................ -- 9,780
Accounts payable .............................. 61,731 182,243
Accounts payable - related parties............. 34,585
Accrued payroll and related taxes ............. 68,906 (41,196)
Accrued liabilities ........................... 42,327 (19,704)
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NET CASH USED BY OPERATING ACTIVITIES ................. (379,283) (307,959)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Disbursements
Acquisition of property and equipment .............. -- (1,355)
Equipment deposits ................................. (1,376,250) --
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DISBURSEMENTS FROM INVESTING ACTIVITIES ............... (1,376,250) (1,355)
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NET CASH USED BY INVESTING ACTIVITIES ................. (1,376,250) (1,355)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Receipts
Proceeds from note payable stockholder .............. -- 30,130
Proceeds from issuance of common stock, net ......... -- 275,000
Proceeds from issuance of preferred stock, net ...... 2,500,000 --
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RECEIPTS FROM FINANCING ACTIVITIES ..................... 2,500,000 305,130
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Disbursements
Payments on capitalized leases ...................... (939) --
Payments on notes payable to shareholders ........... (750,000) --
Payments on notes due related parties ............... (2,224) --
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DISBURSEMENTS FROM FINANCING ACTIVITIES ................ (753,163) --
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NET CASH PROVIDED BY FINANCING ACTIVITIES .............. 1,746,837 305,130
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NET DECREASE IN CASH AND CASH EQUIVALENTS .............. (8,696) (4,184)
CASH AND CASH EQUIVALENTS - BEGINNING .................. 49,875 4,184
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CASH AND CASH EQUIVALENTS - ENDING .....................$ 41,179 $ --
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SUPPLEMENTAL DISCLOSURES:
Cash paid during the period for:
Interest ..........................................$ -- $ 456
Income taxes ......................................$ -- $ --
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See accompanying notes.
AMERICAN MILLENNIUM CORPORATION, INC. AND SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS
NOTE 1. GENERAL BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
General
The accompanying unaudited financial statements of American Millennium
Corporation, Inc. (AMCI) have been prepared in accordance with Rule 10-01 of
Regulation S-X promulgated by the Securities and Exchange Commission and do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, the Company has made all adjustments necessary for a fair
presentation 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.
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 October 31, 2002, 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.
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 September 30, 2002 Shirley Harmon tendered her resignation as Corporate
Secretary. On the same day, our Board of Directors elected Ron Corsentino, the
current Corporate Treasurer, to the office of Corporate Secretary.
NOTE 4. PREFERRED STOCK
On October 11, 2002 the Board of Directors issued 1,000,000 shares of Series A
Non-Voting Cumulative Preferred Stock. 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 issue 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 the
greater of (i) 30% less than the mean between the closing sales or bid price, as
the case may be, of the Common Stock, as reported by the National Quotation
Bureau, Inc. or the OTC Bulletin Board for the 20 consecutive trading days
immediately prior to the date of conversion, or (ii) $0.50 per share.
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 ($485,242 for the three months ending October 31, 2002). In addition, the
Company has used substantial working capital in its operations. Because of
these factors, there is substantial doubt as to our 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
On December 6, 2002, a current shareholder advanced the Company $128,000 in
the form of a one year unsecured promissory note. The note carries interest at
the rate of 12% per annum, payable quarterly.
Item 2. Management's Discussion and Analysis or Plan of Operations
SAFE HARBOR STATEMENT
Certain statements in this Form 10-QSB, including information set forth under
this Item 2 - Management's Discussion and Analysis or Plan of Operations
constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 (the Act). American Millennium
Corporation, Inc. desires to avail itself of certain 'safe harbor' provisions of
the Act and is therefore including this special note to enable us to do so.
Forward-looking statements in this Form 10-QSB or hereafter included in other
publicly available documents filed with the Securities and Exchange Commission,
reports to our stockholders and other publicly available statements issued or
released by us involve known and unknown risks, uncertainties and other factors,
including those described in our Annual Report on Form 10-KSB for the fiscal
year ended July 31, 2002. These risks, uncertainties and other factors
could cause our actual results, performance (financial or operating) or
achievements to differ from the future results, performance (financial or
operating) or achievements expressed or implied by such forward-looking
statements. Such future results are based upon management's best estimates based
upon current conditions and most recent results of operations.
OVERVIEW
We are an information management company specializing in the provision of
services for monitoring remote, high value assets using proprietary hardware and
data management software and wireless communications based on the Vistar
Telecommunications geo-stationary satellite system.
Our primary focus today is on providing information management
services for the oil and gas industry through the development of a telemetry
system for the installed base of gas compressors in North America. The AMCI
Sentry product line includes proprietary hardware and sensors as well as
SatAlarm, the Company's back-end server software, all of which has been fully
integrated into a reliable, easy to use system. The essential function of this
product line is to provide an alert when a gas compressor stops operating
allowing field maintenance personnel the opportunity to quickly go to the
inoperative unit and get it back up
The Sentry gas compressor monitoring device is composed of a Vistar MT 2000
wireless data modem and a vibration sensor developed by AMCI. The vibration
sensor includes an electric device that can discern when the gas compressor
shuts down based on the absence of vibration. The Sentry utilizes a battery that
provides the power to run the unit, including transmitting messages through the
Vistar system. The Sentry requires no on-site connections of any type and is
installed by the use of magnetic clamps. Total installation time is mere minutes
and includes turning on the unit by flipping a switch. Once installed, the
customer then calls AMCI and requests activation onto the AMCI system, which is
usually done before the customer leaves the site.
The Sentry unit is designed to stay at the remote site for years without any
maintenance or on-site support. Because the units are attached magnetically,
they can be easily removed and placed at another location. The commercial
advantages include:
Low cost unit focused on one simple task of providing alarms
Easy to install with no on-site connections
No maintenance required
Battery operated with low power requirements and long life
RECENT DEVELOPMENTS
We have long believed in the potential for satellite tracking opportunities in
South America and so invested substantial time and effort to win the Vistar
Telecom regional operator license to provide their satellite technology and
products into that territory, which we announced on April 22, 2002.
This long-term license allows AMCI to sell tracking devices and satellite
airtime to customers throughout South America on an exclusive basis. Other areas
of the world are covered by separate regional operator licenses such as the one
held by Alcatel for Europe.
In order to properly exploit the South America market, we have teamed up with
Telespazio Brasil, the leading satellite tracking and monitoring distributor in
the territory. Together, we intend to bring the Vistar technology to the
business community in South America and make a material impact on the way
companies move critical information to operate their businesses.
Because of the potential for economic growth in South America over the next
decade, and the lack of sophisticated telecommunications coverage throughout
that area, we believe that this region will see the most significant use of
Vistar technology over that time period of all of the regions licensed by Vistar
Telecom.
On September 24, 2002 we signed a Value-Added Reseller (VAR) agreement with
AeroAstro for the marketing of Satellite Enabled Notification System (SENS)
devices. SENS is a simplex (one-way) communication platform that utilizes
extremely low-power remote devices to send occasional short data messages over
the Globalstar satellite constellation from the field device to a back-office
system. Under the agreement, we may market the SENS technology in the United
States oil & gas industry and in the South American trucking industry.
AeroAstro and Globalstar have formed a partnership to bring the SENS technology
to the market with AeroAstro providing the hardware and Globalstar providing the
satellite system. The system is expected to be commercially released in late
December 2002, with full service across the North American market in March
2003.
The SENS technology is much lower cost than any commercially released low-data
rate satellite communication system, both for the modem device and satellite
airtime. SENS technology meets the need for a very low cost satellite
communication solution and as such will enable classes of applications that were
until now economically infeasible. AMCI recognizes the disruptive potential of
this technology and has moved to maintain and possibly increase its own market
share potential in the face of this technology by adopting it where appropriate
rather than competing against it.
On October 9, 2002 we announced that we appointed Wireless Monitoring, Ltd. of
Calgary, Canada, as a distributor for Canada for our SatAlarm product line.
Wireless Monitoring has placed its first order for our Class I, Division 2
certified hardware.
On October 14, 2002, we announced that we have received Class I, Division 2
certification for hazardous location use of our SatAlarm Sentry product for both
the United States and Canada. This certification entails extensive testing
through an independent laboratory to ensure that the product is non-incendive
and can be used in areas where there may be ignitable atmospheres, such as in
its main application as a call out system for gas compressors.
Also, on October 14, 2002, we announed that we have appointed CC Technology,
Inc., and Technical Sales, Inc. as distributors for the United States for our
SatAlarm product line. Both CC Technology and Technical Sales, Inc. have placed
orders for our product line.
On December 1, 2002 we moved our corporate offices to 110 North Rubey Drive,
Suite 100A, Golden, CO 80403.
In the three months ended October 31, 2002, we have continued to implement our
current product line and business strategy to enhance our ability to achieve
profitability by focusing on our core business of remote asset monitoring.
RESULTS OF OPERATIONS
Revenue. Revenue consists of hardware and airtime sales and custom development
of products for our customers. During the three months ended October 31, 2002,
revenues decreased approximately 16% to $214,282 compared to the same period in
2001. This decrease in year over year revenue was due to fact that we had
held up production of our inventory pending our Class I, Division 2
certification, which we received on October 14, 2002.
Cost of Revenues. Costs of revenues principally consists of manufacturing costs
and the purchase of satellite airtime. Cost of revenues was $135,561 for the
three months ended October 31, 2002, compared to $195,008 for the three months
ended October 31, 2001. Our cost of revenue decreased primarily due to the fact
that we had fewer hardware sales in this quarter as compared to the same quarter
last year. Also, we recognized a larger percentage of support and service
revenue in this quarter than we did in the same quarter last year, which carries
a lower cost of goods sold cost than hardware and airtime sales.
Payroll, Payroll Taxes and Related Benefits. Payroll, payroll taxes, and related
benefits increased by $4,293 in the three months ended October 31, 2002, as
compared to October 31, 2001. 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 October
31, 2002, is 12.
Consulting fees. Consulting fees increased from $18,460 to $107,253 for the
three months ended October 31, 2001 and 2002, respectively. The increase is
due to the fact that we have engaged several consultants to assist us in
engineering consulting work, capital formation and developing the South
American operations.
Selling, General and Administrative. 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 an approximate 24%
increase in total selling, general and administrative expenses compared to the
three month period a year ago. Selling, general and administrative expenses for
the three months ended October 31, 2002 and 2001 were $493,563 and $400,680,
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 three months ended
October 31, 2002 and 2001 was ($70,400) and ($27,414), respectively. The
difference is due to increased interest expense 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 $485,242 (or $0.01 per share) on revenues of
$214,282 for the three months ended October 31, 2002 compared to a net loss of
$368,456 (or $0.01 per share) on revenues of $254,646 for the period ended
October 31, 2001. The increase in net loss was primarily attributable to
increased consulting and professional fees, and an increase in interest
expense.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
We understand that cash and equivalents on hand at October 31, 2002, are not
adequate to meet our short-term capital needs. On October 11, 2002 we issued
1,000,000 shares of our Series A Preferred stock and we received net cash
proceeds of $2,500,000. The majority of this cash was used to make deposits on
equipment and inventory to be used in our South American Operations. Although we
believe that our current and several new investors are committed to our future
success, there can be no assurance that additional funds will be available when
needed on commercially reasonable terms.
As a result of net losses incurred, we have used substantial working capital
in our operations. There is substantial doubt as to our ability to
continue as a going concern without additional financing or capital infusion.
Conditions have existed to limit our ability to market our products and services
at amounts sufficient to recover an acceptable amount of operating and
administrative costs. However, we anticipate that newly instituted controls and
new products may reverse this condition within the next fiscal year.
We have over 600 Sentry units in the field currently being used for production
purposes and under assessment by various customers and resellers. Within the
next two calendar quarters, we anticipate several orders, which could have a
significant impact on our net sales and income.
We believe that recurring revenues derived from monthly satellite charges
should continue to build value for the shareholders. Our principal marketing
efforts are directed toward the oil and gas industry, which has a need for
monitoring high value assets. We anticipate that during the
first part of fiscal year 2003, revenues should increase from the
enrollment of subscribers based on our various initiatives underway with
manufacturers of gas compressors. We will continue to market our services to
those companies for deployment of our system on a fleet basis in order to
optimize upon subscriber enrollment. We currently have over 600 satellite
communicator enabled devices deployed in field operations. These units are
currently monitoring a variety of assets with the bulk of them on
gas compressors in the western United States.
As part of our South American operation, we have a commitment to purchase earth
station equipment from Vistar Telecommunications, Inc. pursuant to an agreement
dated April 22, 2002 for $1,500,000. This entire amount is on deposit with
Vistar Telecommunications pending final delivery of the equipment to us. As part
of the agreement, we are also commited to purchase certain inventory from Vistar
for a total purchase price of $275,000. We currently have $1,626,250 on deposit
with Vistar for this purchase.
We will continue to outsource production and manufacturing. Research,
development, and major marketing efforts will be performed by our existing
employees.
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.
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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 October
31, 2002.
Item 2. Changes in Securities and Use of Proceeds
On October 11, 2002 the Board of Directors issued 1,000,000 shares of Series A
Non-Voting Cumulative Preferred Stock to LISEN, LLC for a purchase price of
$2.50 per share. 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 issue 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 the greater of (i) 30% less than
the mean between the closing sales or bid price, as the case may be, of the
Common Stock, as reported by the National Quotation Bureau, Inc. or the OTC
Bulletin Board for the 20 consecutive trading days immediately prior to the date
of conversion, or (ii) $0.50 per share.
In the event of a liquidation, dissolution or winding up of our company, holders
of the Series A Preferred Stock will first be entitled to receive the original
issue price per share, as adjusted, with any remaining distributions going to
the holders of the Common Stock. Holders of Series A Preferred Stock do not have
any voting rights with respect to their shares of Series A Preferred Stock,
except that the vote or written consent of at least 50% of the outstanding
shares of Series A Preferred Stock, voting as a single class, is required for us
to incur long-term indebtedness in a material amount.
The Series A Preferred Stock issuance was made in reliance upon the exemption
provided by Section 4(2) of the Securities Act of 1933 as a transaction not
involving a public offering.
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.
Item 6. Exhibits and Reports on Form 8-K
(A) Exhibits
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 September 6, 2002 a report on form 8-K was filed with the Securities
and Exchange Commission announcing that shareholder proposals to be
included in the Company's proxy statement for our 2002-2003 Annual
Meeting of Shareholders must be received by the Company on or
before September 23, 2002.
2) On October 28, 2002 a report on Form 8-K was filed with the Securities
and Exchange Commission announcing the Company's sale of 1,000,000 shares
its Series A Non-Voting Cumulative Preferred stock.
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: December 16, 2002 By: /s/ Garrett L. Thomas
----------------------
Garrett L. Thomas
Director
President and
Chief Executive Officer
Dated: December 16, 2002 By:/s/ Ronald J. Corsentino
------------------------
Ronald J. Corsentino
Treasurer, Secretary and
Chief Financial 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: December 16, 2002 By: /s/ Bruce R. Bacon
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Bruce R. Bacon
Director
Vice President of Engineering
and Chief Technology Officer
Dated: December 16, 2002 By: /s/ Stephen F. Watwood
-----------------------
Stephen F. Watwood,
Director
Vice President of Business
Development
Dated: December 16, 2002 By: /s/ Shirley M. Harmon
----------------------
Shirley M. Harmon
Director
Dated: December 16, 2002 By: /s/ Andrew F. Cauthen
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Andrew F. Cauthen
Director
CERTIFICATIONS
I, Garrett L. Thomas, 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 officers 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 officers 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: December 16, 2002 /s/ Garrett L. Thomas
---------------------
Garrett L. Thomas
President and
Chief Executive Officer
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 officers 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 officers 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: December 16, 2002 /s/ Ronald J. Corsentino
---------------------
Ronald J. Corsentino
Treasurer, Secretary and
Chief Financial Officer