FILER: COMPANY DATA: -------------- COMPANY CONFORMED NAME: AMERICAN NORTEL COMMUNICATIONS INC. CENTRAL INDEX KEY: 0000875711 STANDARD INDUSTRIAL CLASSIFICATION: TELECOMMUNICATIONS IRS NUMBER: 87-0507851 STATE OF INCORPORATION: WY FISCAL YEAR END: 630 FILING VALUES: --------------- FORM TYPE: 10-QSB SEC ACT: SEC FILE NUMBER: 001-13134 FILM NUMBER: BUSINESS ADDRESS: ------------------ STREET 1: 7201 E CAMELBACK ROAD, SUITE 320 CITY: SCOTTSDALE STATE: AZ ZIP: 85251 BUSINESS PHONE: 480-945-1266 MAIL ADDRESS: -------------- STREET 1: 7201 E CAMELBACK ROAD, SUITE 320 CITY: SCOTTSDALE STATE: AZ ZIP: 85251 1 U.S. Securities and Exchange Commission Washington, D.C. 20549 ____________________ FORM 10-QSB ____________________ (Mark One) [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2001 [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act For the transition period from _____________ to _______________ ____________________ Commission File No. 1-13134 ____________________ AMERICAN NORTEL COMMUNICATIONS, INC. (Exact name of small business issuer as specified in its charter) Wyoming 87-0507851 (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) 7201 East Camelback Road, Suite 320 Scottsdale, AZ 85251 (Address of principal executive offices) (480) 945-1266 (Issuer's telephone number) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- The number of shares of the issuer's common equity outstanding as of November 27, 2001 was 15,273,785 shares of common stock, no par value. Transitional Small Business Disclosure Format (check one): Yes No X --- --- 2 AMERICAN NORTEL COMMUNICATIONS, INC. INDEX TO FORM 10-QSB FILING FOR THE QUARTER ENDED SEPTEMBER 30, 2001 TABLE OF CONTENTS PART I FINANCIAL INFORMATION PAGE Item 1. Financial Statements Balance Sheets September 30, 2001 (unaudited) and June 30, 2001. . . . . . 4 Statements of Operations For the Three Months Ended September 30, 2001 (unaudited) and 2000 (unaudited). . . . . . . . . . . . . . . . . . . . 5 Statements of Cash Flows For the Three Months Ended September 30, 2001 (unaudited) and 2000 (unaudited). . . . . . . . . . . . . . . . . . . . 6 Notes to the Consolidated Financial Statements . . . . . . . . . 7-8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. . . . . . . . . . . . . . . . . . . . . . 9-13 PART II OTHER INFORMATION Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . 13 SIGNATURES 3 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS AMERICAN NORTEL COMMUNICATIONS, INC. COMPARATIVE BALANCE SHEETS AS OF JUNE 30, 2001 and SEPTEMBER 30, 2001 ASSETS SEPTEMBER 30, 2001 JUNE 30, 2001 (unaudited) CURRENT ASSETS: Cash and Cash Equivalents $ 251,309 $ 219,816 Accounts Receivable 1,795,031 2,153,652 Investment in Marketable Securities 1,175,793 3,221,470 Deferred income taxes 295,229 295,229 Notes Receivables 33,505 32,982 -------------------- --------------- TOTAL CURRENT ASSETS 3,550,867 5,923,149 -------------------- --------------- PROPERTY AND EQUIPMENT: Furniture and Fixtures 4,660 4,660 Equipment & Computer Equipment 81,657 81,657 Telecommunications Property 1,650 1,650 LESS: Accumulated Depreciation and Amortization (67,975) (64,375) -------------------- --------------- TOTAL PROPERTY AND EQUIPMENT 19,992 23,592 -------------------- --------------- OTHER ASSETS: Other Assets 6,667 6,667 Investment in Unconsolidated Subsidiaries 229,888 165,282 -------------------- --------------- TOTAL OTHER ASSETS 236,555 171,949 -------------------- --------------- TOTAL ASSETS 3,807,414 6,118,690 -------------------- --------------- LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Trade Accounts Payable 240,728 280,644 Trade Accounts Payable - Other 339,101 339,101 Income Taxes Payable 381,431 396,431 Accrued Expenses 182,122 210,729 Accrued Interest 48,438 48,438 Note Payable 50,000 50,000 Factoring Arrangement -0- 237,806 Notes Payable Affliate 48,263 -0- -------------------- --------------- TOTAL CURRENT LIABILITIES 1,290,082 1,563,149 -------------------- --------------- STOCKHOLDER' EQUITY: Common Stock no par value, 50,000,000 shares 15,273,785 and 15,273,785 issued and outstanding For September 30, 2001 and June 30, 2001 21,980,202 21,980,202 Additional Paid In Capital 51,795 51,795 Treasury Stock, 236,858 shares at cost (759,773) (759,773) Unrealized gain on investments held for sale 1,157,912 15,201 Retained Deficit (17,596,979) (16,731,884) -------------------- --------------- TOTAL STOCKHOLDERS' EQUITY 2,517,333 4,555,541 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 3,807,414 $ 6,118,690 -------------------- --------------- See the accompanying notes to these unaudited financial statements 4 AMERICAN NORTEL COMMUNUNICATIONS, INC. STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2001 AND SEPTEMBER 30, 2000 THREE MONTH THREE MONTH ENDED SEPTEMBER ENDED SEPTEMBER 30, 2001 30, 2000 ----------------- ----------------- (unaudited) INCOME Revenue $ 1,063,920 $ 3,199,036 COST OF SALES 577,277 2,587,806 ----------------- ----------------- GROSS PROFIT 468,643 611,231 ----------------- ----------------- SELLING EXPENSES -0- 111,262 GENERAL AND ADMINISTRATIVE 360,303 278,158 DEPRECIATION AND AMORTIZATION 3,600 38,523 ----------------- ----------------- TOTAL EXPENSES 363,903 427,943 ----------------- ----------------- EARNINGS (LOSS) FROM OPERATIONS 122,741 183,287 ----------------- ----------------- OTHER INCOME (EXPENSE) Other Income -0- 8,479 Interest Income/(Expense) (1,746) (16,718) Impairment Loss (989,581) -0- ----------------- ----------------- TOTAL OTHER INCOME (EXPENSE) (865,835) (25,197) ----------------- ----------------- Net Income (Loss) Before Income Taxes (865,094) 208,484 Provisions for Income Taxes -0- 89,204 ----------------- ----------------- NET INCOME (LOSS) $ (865,094) $ 119,280 ================= ================= EARNINGS (LOSS) PER SHARE: Basic Earnings (Loss) Per Share ($.06) $ .01 ================= ================= WEIGHTED AVERAGE NUMBER OF COMMON 15,273,785 15,273,785 ================= ================= SHARES OUTSTANDING Diluted Earnings (Loss) Per Share ($.06) $ .01 ================= ================= WEIGHTED AVERAGE NUMBER OF COMMON 15,273,785 15,273,785 ================= ================= AND COMMON SHARE EQUIVALENTS OUTSTANDING See the accompanying notes to these unaudited financial statements 5 AMERICAN NORTEL COMMUNUNICATIONS, INC. STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2001 AND SEPTEMBER 30, 2000 THREE MONTH THREE MONTH ENDED ENDED SEPTEMBER 30, SEPTEMBER 30, 2001 2000 --------------- --------------- (unaudited) CASH FLOWS FROM OPERATING ACTIVITIES Net Income $ (865,094) 119,280 Adjustments to reconcile net income to net cash used by operating activities. Depreciation and amortization 3,600 3,600 Impairment Loss 989,581 -0- (Increase) decrease in assets Trade accounts receivable 358,621 1,310,706 Prepaid and other current assets -0- (69,405) Deferred Tax Asset -0- (13,969) Increase (decrease) in liabilities Trade accounts payable (39,916) (322,153) Income Taxes payable (15,000) 103,173 Accrued Interest -0- 1,124 Factoring Arrangement (237,806) -0- Accrued Liabilities (28,607) (43,600) --------------- --------------- NET CASH PROVIDED (USED) IN 165,377 1,088,756 OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Note Recievables Affliates (523) -0- Investment in Subsidiary (181,624) -0- Purchases of marketable securities -0- (700,000) --------------- --------------- NET CASH USED BY INVESTING ACTIVITIES (182,147) (700,000) CASH FLOWS FROM FINANCING ACTIVITIES Principal payments notes -0- (704,595) Notes to Affiliates 48,263 -0- --------------- --------------- NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 48,263 (704,595) NET INCREASE (DECREASE) IN CASH 31,493 (315,839) CASH AT BEGINNING OF PERIOD 219,816 1,405,002 --------------- --------------- CASH AT END OF PERIOD $ 251,309 $ 1,089,163 =============== =============== 6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2000 AND SEPTEMBER 30, 1999 1. Basis of Presentation The accompanying unaudited financial statements represent the consolidated financial position of American Nortel Communications, Inc. ("Company") as of September 30, 2001 and include results of operations of the Company and cash flows for the three months ended September 30, 2001. These statements have been prepared in accordance with generally accepted accounting principles for interim financial information and the instructions for Form 10-QSB. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles ("GAAP") for complete financial statements. In the opinion of management, all adjustments to these unaudited financial statements necessary for a fair presentation of the results for the interim period presented have been made. The results for the three months ended September 30, 2001 may not necessarily be indicative of the results for the entire fiscal year. These financial statements should be read in conjunction with the Company's Form 10-KSB for the year ended June 30, 2001, including specifically the financial statements and notes to such financial statements contained therein. 2. Summary of Significant Accounting Policies The accounting policies followed by the Company, and the methods of applying those policies, which affect the determination of its financial position, results of operations or cash flows are summarized below: Cash and Cash Equivalents ------------------------- Cash and cash equivalents include all short-term liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less. At times cash deposits may exceed government insured limits. Concentration of Credit Risk ---------------------------- The Company maintains its cash balances in two banks in Phoenix, Arizona. The Federal Depository Insurance Corporation (FDIC) insures accounts at each institution up to $100,000. The Company maintains investment balances with two brokerage firms. The Security Investor Protection Corporation (SPIC) insures accounts at these firms up to $500,000. Income Taxes ------------ Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes, which, among other things, requires that recognition of deferred income taxes be measured by the provisions of enacted tax laws in effect at the date of the financial statements. No tax benefit was recorded on the expected operating loss for the quarter ended as the year ended does not expect the realizability of the deferred tax asset and it is uncertain. Therefore we are providing a 100% valuation of the tax benefit until fully restored. Revenue Recognition ------------------- The Company's revenues are derived principally from long distance service. Revenue is recorded when service is rendered, which is when a long distance call is completed, and is recorded net of an allowance for certain amounts which the Company estimates will be refunded, rebated, uncollectable, or not billable. 7 Fair Value of Financial Instruments ----------------------------------- The carrying amounts for cash, investments in marketable securities, trade accounts receivable, trade accounts payable, accrued liabilities and notes payable, approximate their fair value due to the short maturity of these instruments. The Company has determined that the recorded amounts approximate fair value. Net Income Per Share -------------------- Net loss per share is calculated using the weighted average number of shares of common stock outstanding during the year. The Company has adopted the provisions of Statement of Financial Accounting Standards No. 128, Earnings Per Share. Use of Estimates ---------------- The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions. This may affect the reported amounts of assets and liabilities and disclosure of assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Stock-Based Compensation ------------------------ Statements of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation ("SFAS 123"), established accounting and disclosure requirements using a fair-value based method of accounting for stock-based employee compensation. In accordance with SFAS 123, the Company has elected to continue accounting for stock based compensation using the intrinsic value method prescribed by Accounting Principles Board Opinion No. 25. 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Except for historical information contained herein, the following discussion contains forward-looking statements that involve risks and uncertainties. Such forward-looking statements include, but are not limited to, statements regarding future events and our plans and expectations. Our actual results could differ materially from those discussed herein. Factors that could cause or contribute to such differences include, but are not limited to, those discussed elsewhere in this Form 10-QSB or incorporated herein by reference. See "Special Note on Forward-Looking Statements" below. OVERVIEW American Nortel Communications, Inc. ("ANC" or "Company") is a reseller of 1-Plus and 1-800, 888 long-distance telecommunications services. ANC resells to it's customers long distance telephone time that it purchases or leases from other long distance carriers. ANC resells long distance telephone services to both business and residential customers. As a reseller it purchases or leases long distance time from other carriers and resells that time to its customers. ANC is charged for the time it uses beyond certain minimum requirements and in turn charges its customers a certain amount per minute. To a large extent, ANC's profits are dependent upon the spread between its cost per minute and the amount it charges its customers, and its results of operations are directly affected by competition, which in recent years has lowered the amount resellers can charge customers. ANC out-sources its sales and marketing to telemarketers and it pays those telemarketers a certain amount for each new customer obtained. We do not direct-bill our customers, but rather we utilize the Local Exchange Carriers (LEC) which provide telephone services to our long-distance customers, and performs billing and collections. LEC's receive a fee based upon a certain percentage of amount collected. Management believes that the practice of billing through LECs has a substantial advantage since it increases the likelihood and promptness of our collections. We have determined to change our 1 plus and 800, 888 long distance strategy. ANC has determined that profit margins from the long distance service offerings that it has achieved in the past, has narrowed to an unacceptable extent. The long distance market as a whole has experienced a decrease in profit margins due to the very aggressive pricing competition that has characterized the industry during the last several years. ANC has changed its business endeavors to reflect the dynamic telecommunications market. ANC has ceased its marketing efforts in long distance service offerings and has dedicated that portion of its operating budget to investments in other companies, particularly in early stage companies that are in need of working capital. One of the investments by ANC is Morgan Cooper, Inc. (MCII) which was primarily involved in designing contemporary styled clothing. The Company is currently dormant but the potential acquisition has other opportunities available for the future. Presently Morgan Cooper is performing due diligence on a distribution company that could be a business match for Morgan Cooper, Inc. Another investment by ANC is Medcom USA, Inc. (EMED). Medcom enables paperless electronic verifications and transactions, a web healthcare portal, and online purchase of home medical equipment through its operating units. Investments in Marketable Securities 9 Investments in marketable securities consisted of the following at September 30, 2001: Gross Unrealized Fair Cost Gains Losses Value ---------- ----------- ------------ ---------- Equity securities $2,323,569 $ 86,282 $(1,234,058) $1,175,793 We have invested in common stock and related warrants of several publicly traded companies. At September 30, 2001, our investment in marketable securities is made in four different companies. The investment in one such company's securities represents approximately 55% of the estimated aggregate fair value of all investments in marketable securities at September 30, 2001. At September 30, 2001, we held stocks of the following companies: Dauphin Technologies, Inc. ("DNTK"). DNTK designs manufactures and markets mobile hand-held, pen based computers, as well as other electronic devises for home and business use. DNTK primary product line is a handheld computer developed with the multi-sector mobile user in mind. This product incorporates an upgradeable processor, user upgradeable memory and hard disk, various modules and mobile devices. Sonoma Financial Corporation/Victormaxx Technologies, Inc. ("VMAX"). VMAX incorporates financial service companies that operate a chain of stores devoted to providing low documentation, short-term consumer loans. VMAX is one of the largest payday advance operations in the Chicago area. PTN Media, Inc. ("PTNM"). PTNM is an interactive media content provider focusing on providing branded content using a combination of new and traditional media. PTNM initial web-site focus on fashion, beauty, style, fitness, and related subjects. PTNM currently provides this content on its interactive web site www.fashionwindow.com. --------------------- Cynet, Inc. ("CYNE"). CYNE is an Internet business applications solutions provider integrating convergent messaging with Internet services. CYNE's products and services include convergent messaging, which includes fax, data, voice, email and wireless messaging, and Internet services, which includes custom application development, e-commerce development, web content creation, web hosting and internet access. The entities in which we have investments are generally small, under capitalized corporations whose stock is traded in the over-the-counter and NASDQ markets. The issuers may have limited operating histories and limited revenues. ANC intends to seek an investment in an operating subsidiary to offset the reduction in profit margins. However, we have not presently identified the business in which we intend to invest our resources in an effort to mitigate the effects of the declining profitability in the long distance reseller business. American Nortel is a Wyoming corporation that was formed in 1979. In September 1994, American Nortel and its subsidiary Nortel Communications, Inc., filed petitions under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court, District of Utah, Central Division (Case Numbers 948-24604 and 948-24605). The proceedings were later converted to Chapter 7 liquidation proceedings, and dismissed on February 7, 1996. American Nortel sold its Nortel Communications subsidiary in June 1996 for nominal consideration to an affiliate of former directors. During the pendancy of the bankruptcy proceedings, in June 1995, a controlling stock interest in the company was sold to Wilcom, Inc., which is currently the majority stockholder of the Company. In February 1996 the bankruptcy proceedings were dismissed. Presently, ANC is in the business of long distance telecommunications services offerings. 10 ADDITIONAL INFORMATION ANC files reports and other materials with the Securities and Exchange Commission. These documents may be inspected and copied at the Commission's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C., 20549. You can obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. You can also get copies of documents that the Company files with the Commission through the Commission's Internet site at www.sec.gov. -------- RESULTS OF OPERATIONS Revenues for the quarter ended September 30, 2001 were $1,063,920 as compared to during the quarter ended September 30, 2000 of $3,199,036. The decrease in revenue is principally the result of decrease of our basic 1 Plus and 800, 888 long distance service. We have focused our growth and revenue towards the investment in other OTC: Bulletin Board and NASDQ Companies. We have maintained our call volumes in the telecommunication's industry and maintained our revenues. However, we have experienced continued increases in competition in the U.S. domestic market, and continue to seek joint venture and investment acquisition opportunities to potentially lessen the effects of cost competition in the domestic telecommunication market. . Cost of sales for the quarter ended September 30, 2001 was $577,277 as compared to quarter ended September 30, 2000 of $2,587,806. Our cost of sales has decreased in relation to the decrease in revenues. Cost of sales is comprised of long-distance fees we pay providers of long-distance service that we resell, telemarketing costs, allowances for bad debt, and our billing costs. Billing costs include fees for services provided by LECs and other outside parties to transfer and organize our customer acquisition, billing, and collection data. Selling expenses for the quarter ended September 30, 2000 was $111,262. Selling expenses were primarily the costs associated with the cost of acquiring customers. We have decreased our marketing efforts as competition in the U.S. domestic long-distance markets increase. We are seeking joint venture opportunities to counter act the competition in the telecommunication industry. General and administrative expenses for quarter ended September 30, 2001 was $360,303 as compared to quarter ended September 30, 2000 of $278,158. These costs are primarily related to customer service staffing, which we believe provides better service to our customers. The costs also include executive compensation and benefit costs. Interest income net of interest expense for the quarter ended September 30, 2001 was $1,746 as compared to September 30, 2000 of net interest income of $25,197. Interest expense has decrease as a result of the reduction of debt by the company. Impairment loss for quarter ended September 30, 2001 was ($989,581). The investment of Medcom USA, Inc. (EMED) was valued at $.09 per share to reflect the change in management and divestitures of all non-profitable ventures by prior management. Also the investment of Morgan Cooper, Inc. (MCII) was valued at $.001 to reflect the fact that the company "MCII" is presently not operating and is seeking acquisition in the distribution industry to have business continuity and continuity of interest. No tax benefit was recorded on the expected operating loss for the quarter ended September 30, 2001 as required by Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes. For the year ended we do not expect to realize the deferred tax asset and it is uncertain therefore we have provided a 100% valuation of the tax benefit and assets until we are certain to experience net profits in the future to fully realize the tax benefit and tax assets. 11 Net loss for the quarter ended September 30, 2001 was ($865,094) or ($.06) per diluted share compared Net Income for quarter ended September 30, 2000 of $119,280 or $.01 per diluted share. LIQUIDITY AND CAPITAL RESOURCES Cash provided by operating activities for the quarter ended September 30, 2001, was $165,377 as compared to quarter ended September 30, 2000 of $1,088,756. We have funded our working capital requirements primarily from our principal source of revenue generated from providing long distance service as a long distance reseller. Cash used by investing activities was $181,147 for the quarter ended September 30, 2001 as compared to quarter ended September 30, 2000 of $700,000. We invested in our subsidiaries EMED and MCII during the three months ended September 30, 2001. We purchased 150,000 common shares of PTNM and exercised 200,000 options at a $1.00 options price during the quarter ended September 30, 2000. Cash provided from financing activities was $48,263 in the quarter ended September 30, 2001 compared to cash used from financing activities for quarter ended September 30, 2000 of $704,595. Wilcom borrowed $48,263 to the company during three months ended September 30, 2001. We paid $704,595 on our credit facility with RFC Capital, Inc for the quarters ended September 30, 2000. This amount represents the total payments made to reduce the outstanding balances of our outstanding credit facility. OTHER CONSIDERATIONS There are numerous factors that affect our business and the results of its operations. Sources of these factors include general economic and business conditions, federal and state regulation of our business activities, the level of demand for our services, the level and intensity of competition in the telecommunications industry and the pricing pressures that may result, our ability to develop new services based on new or evolving technology and the market's acceptance of those new services, our ability to timely and effectively manage periodic product transitions, the services, customer and geographic sales mix of any particular period, and our ability to continue to improve our infrastructure (including personnel and systems) to keep pace with the growth in its overall business activities. Factors that may affect our business is the regulations by Securities Exchange Commissions related to the possibility that we could be treated as an investment company. The Securities Exchange Commission regulation states that if our available-for-sale investments fair market value exceeds our operating assets we could be classified as an investment company. However, the Securities Exchange Commissions has been requested by various companies to reconsidering this regulation. SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS Except for historical information contained herein, this Form 10-QSB contains express or implied forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act. We intend that such forward-looking statements be subject to the safe harbors created thereby. We may make written or oral forward-looking statements from time to time in filings with the SEC, in press releases, quarterly conference calls or otherwise. The words "believes," "expects," "anticipates," "intends," "forecasts," "project," "plans," "estimates" and similar expressions identify forward-looking statements. Such statements reflect our current views with respect to future events and financial performance or operations and speak only as of the date the statements are made. 12 Forward-looking statements involve risks and uncertainties and readers are cautioned not to place undue reliance on forward-looking statements. Our actual results may differ materially from such statements. Factors that cause or contribute to such differences include, but are not limited to, those discussed elsewhere in this Form 10-QSB, as well as those discussed in our Form 10-KSB which is incorporated by reference in this Form 10-QSB. Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the results contemplated in such forward-looking statements will be realized. The inclusion of such forward-looking information should not be regarded, as a representation that the future events, plans, or expectations contemplated will be achieved. We undertake no obligation to publicly update, review, or revise any forward-looking statements to reflect any change in our expectations or any change in events, conditions, or circumstances on which any such statements based. Our filings with the SEC, including the Form 10-KSB, may be accessed at the SEC's Web site, www.sec.gov. ------------ PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS ANC is involved in various legal proceedings and claims as described in our Form 10-KSB for the year ended June 30, 2001. No material developments occurred in any of these proceedings during the quarter ended September 30, 2001. The costs and results associated with these legal proceedings could be significant and could affect the results of our future operations. ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K EXHIBITS NO REPORTS ON FORM 8-K SIGNATURES In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. AMERICAN NORTEL COMMUNICATIONS, INC. By /s/ William P. Williams ----------------------------- William P. Williams, Chairman of the Board, Chief Executive Officer, and President Dated: December 27, 2001 13