2
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended June 30, 2005.
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the transition period from __________ to __________.
COMMISSION FILE NUMBER: 0-20033
AMERIRESOURCE TECHNOLOGIES, INC.
-------------------------------
(Exact Name of Small Business Issuer as Specified in its Charter)
DELAWARE 84-1084784
--------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3440 E. Russell Road, Suite 217, Las Vegas, Nevada 89120
---------------------------------------------------------
(Address of Principal Executive Offices)
(702) 214-4249
---------------
(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 [ ]
On August 12, 2005, there were 59,789,592 outstanding shares of the
issuer's common stock, par value $0.0001.
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION 3
ITEM 1. Financial Statements F-1
ITEM 2. Management's Discussion & Analysis or Plan of Operations 4
ITEM 3. Controls and Procedures 7
PART II - OTHER INFORMATION 7
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 7
ITEM 6. Exhibits and Reports on Form 8-K 7
SIGNATURES 8
INDEX TO EXHIBITS 9
CERTIFICATIONS 10
2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
As used herein, the term "Company" refers to AmeriResource
Technologies, Inc., a Delaware corporation, and its subsidiaries and
predecessors, unless otherwise indicated. Consolidated, unedited, condensed
interim financial statements including a balance sheet for the Company as of the
quarter ended June 30, 2005, statement of operations and statement of cash flows
for the interim period up to the date of such balance sheet and the comparable
periods of the preceding year are attached hereto beginning on Page F-1 and are
incorporated herein by this reference.
The consolidated financial statements for the Company included herein
are unaudited but reflect, in management's opinion, all adjustments, consisting
only of normal recurring adjustments that are necessary for a fair presentation
of the Company's financial position and the results of its operations for the
interim periods presented. Because of the nature of the Company's business, the
results of operations for the six months ended June 30, 2005 are not necessarily
indicative of the results that may be expected for the full fiscal year. The
financial statements included herein should be read in conjunction with the
financial statements and notes thereto included in the Form 10-KSB for the year
ended December 31, 2004.
3
AMERIRESOURCE TECHNOLOGIES, INC
AND SUBSIDIARIES
Consolidated Balance Sheets
Unaudited
ASSETS
June 30, December 31,
2005 2004
----------------- -----------------
Net Assets
-----------
Cash and cash equivalents $ 284,064 $ 8,029
Prepaid expenses 6,553
Accounts receivable 2,211
Notes receivable 6,065 16,935
----------------- -----------------
Total Current Assets 298,893 24,964
- 71,500
----------------- -----------------
Investment:
-----------
Fixed Assets:
-------------
Equipment 64,198
Leasehold improvements 1,602 7,442
Accumulated depreciation (2,427) (411)
----------------- -----------------
Net Fixed Assets 63,373 7,031
Other Assets:
-------------
Marketable securities 621 138,121
Investment in subsidiary 80,000
Deposits 6,111
Intangible assets net of amortization 49,156
Accumulated amortization (5,443)
----------------- -----------------
Total Other Assets 130,445 138,121
----------------- -----------------
Total Assets $ 492,711 $ 241,616
================= =================
F-1
AMERIRESOURCE TECHNOLOGIES, INC
AND SUBSIDIARIES
Consolidated Balance Sheets
Unaudited
(continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
June 30, December 31,
2005 2004
----------------- -----------------
Current Liabilities
Accounts payable $ 23,584 $ 973
Notes payable 638,932 422,932
Accrued interest 150,629 109,114
Notes payable - related party 5,600 19,736
Accrued expenses 60,000
----------------- -----------------
Total Current Liabilities 878,745 552,755
Non-Current Liabilities:
Commitments and contingencies 105,000 105,000
Notes payable 40,000
----------------- -----------------
Total Other Liabilities 145,000 105,000
----------------- -----------------
Total Liabilities 1,023,745 657,755
----------------- -----------------
Stockholder's Equity
Preferred stock, $.001 par value; authorized 131 131
10,000,000 shares; Class A, issued and outstanding
131,275 shares
Preferred stock, $.001 par value; authorized, 177 177
10,000,000; Class B, issued and outstanding,
177,012 shares
Preferred stock, $.001 par value; authorized, 1,000 1,000
1,000,000 shares; Class C, issued and outstanding,
1,000,000 shares
Preferred stock, $.001 par value; authorized, 750,000 250 250
shares; Class D, none issued and outstanding
Common Stock, $.0001 par value; authorized, 6,068 3,027
3,000,000,000 shares; issued and outstanding,
41,169,164 and 30,276,416
Comprehensive loss on marketable securities (3,108) (3,108)
Additional paid in capital 17,454,990 16,872,614
Retained earnings (18,604,734) (17,290,230)
Minority interest 614,192
----------------- -----------------
Total Stockolders' Equity (531,034) (416,139)
Total Liabilities and Stockholders' Equity $ 492,711 $ 241,616
================= =================
F-2
AMERIRESOURCE TECHNOLOGIES, INC
AND SUBSIDIARIES
Consolidated Statement of Operations
Unaudited
For the quarter ended For the six months ended
June 30, June 30,
2005 2004 2005 2004
--------- -------- --------- --------
Net service income $ 300 $ - 3,085
Sales 12,549 12,549
Consulting income 15,000 40,000
--------- -------- --------- --------
Revenues 12,849 15,000 15,634 40,000
Cost of goods sold 62,554 - 64,852
--------- -------- --------- --------
Gross Profit (49,705) 15,000 (49,218) 40,000
Operating expenses
General and administrative expenses 104,478 8,364 194,459 42,729
Salaries 35,000 25,000 60,000 50,000
Legal and professional 85,425 47,341 153,663 94,210
Consulting 388,102 423,283 576,303 494,701
Research and development 50,468 87,426
--------- -------- --------- --------
Operating loss (713,178) (488,988) (1,121,069)(641,640)
Other income (expenses)
Loss on write-down of investment - (16,500)(101,332)
Interest expense (27,740) (43,508)
Loan extension expense - (8,000)
Minority interest 131,339 200,067
--------- -------- -------- --------
Net income (loss) before income tax (609,579) (488,988) (989,010) (742,972)
Income tax provision - -
--------- -------- --------- --------
Net income (loss) $ (609,579)$ (488,988$ (989,010)$ (742,972)
========= ======== ========= ========
Earnings (loss) per share (0.01) (0.04) (0.02) (0.07)
========= ======== ========= ========
Weighted average common 52,122,168 11,572,476 48,071,924 10,197,607
shares outstanding
========== ========== ========== ==========
F-3
AMERIRESOURCE TECHNOLOGIES, INC
AND SUBSIDIARIES
Consolidates Statement of Stockholders' Equity
Unaudited Accumulated
$.0001 par value Preferred stock Other
Common stock $.001 par value Additional Comprehensive Accumulated Minority
Shares Amount Shares Amount Paid in capital Loss Deficit Interest
---------- ------- --------- ------ --------------- ------- ---------- ---------
Balance at December 31, 2003 7,828,854 $ 783 1,329,621 1,330 $ 16,110,805 $ (3,108) (14,771,694)
Shares Issued:
Consulting services 12,062,604 1,206 228,666 228 380,682
Legal services 1,048,617 105 94,038
Extension/modification of note 453,475 45 (45)
Options Exercised 227,250 23 (23)
Investment in Eaglerider 250,000 25 71,475
Subscription agreement 1,206,575 121 (121)
Reduction of note payable 5,000,000 500 99,500
Net loss for the year (2,518,536)
Fractional shares, rounding from split2,199,041 219 116,303
----------- ------ ----------- ------- ------------ ------ ----------- --------
Balance at December 31, 2004 30,276,416 3,027 1,558,287 1,558 16,872,614 (3,108) (17,290,230) -
----------- ------ ----------- ------- ------------ ------- ----------- --------
Shares Issued:
Extension/modification of note 400,000 40 7,960
Consulting services 8,983,277 898 161,303
Legal services 1,509,471 151 30,038
Net loss for the period (379,431) 68,728
Subsidiaries Roboserver and Net2auction (221,486) 22,142
Balance at March 31, 2005 41,169,164 4,116 1,558,287 1,558 17,071,915 (3,108) (17,891,147) 90,870
========== ===== ========== ======= ============ ======= =========== ======
F-4
AMERIRESOURCE TECHNOLOGIES, INC
AND SUBSIDIARIES
Consolidates Statement of Cash Flows
Unaudited
For the six months ended
June 30,
2005 2004
--------- --------
Reconciliation of net loss use in operating activities:
Net loss (989,010) (742,972)
Non-cash items:
Depreciation/amortization 7,459 26
Non-cash services through issuance of stock 585,582 683,451
Write down of investment 16,500
Changes in assets affecting operations (increase)/decrease
Accounts receivable (2,211)
Prepaid expenses (6,553)
Notes receivable 10,870 6,371
Deposits (6,111)
Changes in liabilities affecting operations increase / (decrease)
Accounts Payable 22,611
Accrued payroll and related expe 60,000 59,000
Accrued interest 41,515
Note payable - related party (14,136)
--------- --------
Net cash provided by (used in)operating activities (273,484) 5,876
--------- --------
Cash flows from investing activities:
Purchase of assets (58,358)
Purchase of intangible assets (49,156)
Purchase of subsidiary (80,000)
--------- --------
Net cash used in investing activities (187,514)
--------- --------
Cash flows from financing activities:
Net proceeds from borrowing 256,000
Net proceeds from issuance of common stock 481,033
--------- --------
Net cash provided by financing activities 737,033
--------- --------
Increase (decrease) in cash $ 276,035 $ 5,876
--------- --------
Cash - beginning of the period $ 8,029 $ 34,090
--------- --------
Cash - end of the period $ 284,064 $ 39,966
========= ========
F-5
NOTE 1 - DESCRIPTION OF DEVELOPMENT STAGE ACTIVITIES
----------------------------------------------------
AmeriResource Technologies, Inc., formerly known as KLH Engineering Group, Inc
(the Management Company), a Delaware corporation, was incorporated March 3, 1989
for the purpose of providing diversified civil engineering services throughout
the United States, to be accomplished through acquisitions of small to mid-size
engineering firms. On July 17, 1996, the Company changed its name to
AmeriResource Technologies, Inc.
NOTE 2 - BASIS OF PRESENTATION
-------------------------------
The unaudited financial statements included herein have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB and Item 301(b) of
Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three and six months ended June 30,
2005 and 2004 are not necessarily indicative of the results that may be expected
for the fiscal years ending December 31, 2005. For further information, the
statements should be read in conjunction with the financial statements and notes
thereto included in the Company's registration statement on Form 10-KSB.
Principles of consolidation
The consolidated financial statements include the combined accounts of
AmeriResource Technologies, Inc., West Texas Real Estate & Resources', Inc.,
RoboServer Systems, Inc., Self-Serve Technologies, Inc. Net2Auction, Inc.,
Net2Auction Corporation, VOIPCOM USA, Inc., and Tomahawk Construction Company.
All material intercompany transactions and accounts have been eliminated in
consolidation.
Loss per common share
Loss per common share is based on the weighted average number of common shares
outstanding during the period.
NOTE 3 - INVESTMENT
-------------------
On or about April 15, 2005, the Company purchased the majority stock of the
voting common stock of VOIPCOM USA, Inc. for the price of Eighty thousand
dollars ($80,000.00). VOIPCOM USA, Inc. is a Delaware corporation. The Company
effectively, controls approximately 97% or Twenty-three million (23,000,000)
shares of the outstanding voting common stock of VOIPCOM USA, INC. This purchase
is being treated as an investment in subsidiaries.
A Stock Exchange Agreement was executed and made effective on January 27, 2004
whereby the Company acquired a 40% interest in 449 Corporation ("449") and WDHQ
Corporation ("WDHQ") for 3,000,000 shares of the Company's common stock and
$60,000 cash. The Company paid $30,000 with the signing of the revised Stock
Exchange Agreement with the balance to be paid on or before July 31, 2004. 449
and WDHQ operate a business located in San Diego, California, as EagleRider.
Eagle Rider provides rental of Harley Davidson motorcycles and recreational
equipment. This investment was accounted for as a non-marketable equity
investment by the Company. However, the Company sold its interests in both 449
and WDHQ on April 19, 2005, which we disclosed on Form 8-K, filed with the SEC
on April 28, 2005.
F-6
NOTE 4 - STOCKHOLDERS' EQUITY
-----------------------------
Common stock
In December of 2004, the Company approved a 40 for 1 reverse stock split. The
shares are shown after the reverse split.
During the second quarter ending, June 30, 2005, the Company issued the total of
19,252,030 shares of common stock:
17,161,030 shares of common stock were issued for consulting services
valued at $343,207.
2,091,000 shares of common stock were issued for legal and professional
services valued at $41,820.
Preferred stock
The Company has currently designated 10,000,000 shares of their authorized
preferred stock to Series A Convertible Preferred Stock and an additional
10,000,000 shares to Series B Convertible Preferred Stock.
Both Series A and B preferred stock bear a cumulative $.125 per share per annum
dividend, payable quarterly. The shareholders have a liquidation preference of
$1.25 per share, and in addition, all unpaid accumulated dividends are to be
paid before any distributions are made to common shareholders. These shares are
subject to redemption by the Company at any time at a price of $1.25 plus all
unpaid accumulated dividends. Each preferred share is convertible, at any time
prior to a notified redemption date, to one common share. The preferred shares
have equal voting rights with common shares and no shares were converted in
2004. Dividends are not payable until declared by the Company.
F-7
NOTE 4 - STOCKHOLDERS' EQUITY (con't)
-----------------------------
On or about April 27, 2005, the Company filed with the Securities & Exchange
Commission the AmeriResource Technologies, Inc. 2005 Stock Incentive Plan for
the purpose of encouraging AmeriResource's officers, employees, and the
officers, and employees of the Companies subsidiaries and other people, to
acquire a proprietary interest in the Company and strengthening their desire to
remain with the Company. The Stock Incentive Plan was filed on Form S-8 for the
registration of Twenty-five Million (25,000,000) shares of common stock pursuant
to Section 12 of the Exchange Act.
On February 22, 2002, the Company filed a "Certificate of Designation" with the
Secretary of State with the State of Delaware to designate 1,000,000 shares of
its Preferred Stock as "Series C Preferred Stock". Each share of the Series C
Stock shall be convertible into common stock of the Company based on the stated
value of the $2.00 divided by 50% of the average closing price of the Common
Stock on five business days preceding the date of conversion. Each share of the
outstanding Series C Preferred shall be redeemable by the Corporation at any
time at a redemption price of $2.00 per share with interest of 8% per annum. The
holders of the Series C also possess liquidation rights of $2.00 per share
superior in priority to holders of common stock or any junior securities.
On February 22, 2002, the Company filed a "Certificate of Designation" with the
Secretary of State of the State of Delaware to designate 750,000 shares of its
Preferred Stock as "Series D Preferred Stock". Each share of the Series D Stock
shall be convertible into one share of common stock of the Company. Each share
of the outstanding Series D Preferred shall be redeemable by the Corporation at
any time at a redemption price of $.001 per share with interest of 8% per annum.
The holders of the Series D also possess liquidation right of $.001 per share
superior in priority to holders of common stock or any junior securities.
Delmar Janovec, President & CEO, exchanged the interest owed to him on the
dividends relating to Series A and B Preferred Stock in the approximate amount
of $2,000,000 for the new class of Series C Preferred Stock that was approved by
the Board of Directors on January 31, 2002.
F-8
NOTE 5- NOTE PAYABLE
--------------------
The Company had the following notes payable outstanding as of June 30, 2005:
Note dated August 2, 2000, payable to American Factors,
secured by 300,000 shares of the Company's common stock. The 422,932
note bears interest at 15%.
Note dated 2002, no interest bearing, no specified due date 85,000
Note dated April 12, 2005, prime plus 3% interest bearing,
with due date of November 12, 2005. Parties have the option to
convert to R-144 stock upon mutual consent. 80,000
Note dated 2005, $1,000 interest, due July 2005. 51,000
Note dated 2005, prime interest, due in 14 months 40,000
Total notes payable 678,932
Less current portion (638,932)
----------------------
Long-term portion $ 40,000
======================
Maturities of notes payable at June 30, 2005, are as follows:
2005 $ 638,932
2006 40,000
2007 --
Thereafter --
$ 678,932
NOTE 6 - GOING CONCERN UNCERTAINTY
----------------------------------
The accompanying financial statements have been prepared in conformity with
principles of accounting applicable to a going concern, which contemplates the
realization of assets and the liquidation of liabilities in the normal course of
business. The Company has incurred continuing losses and has not yet generated
sufficient working capital to support its operations. The Company's ability to
continue as a going concern is dependent, among other things, on its ability to
reduce certain costs, obtain new contracts and additional financing and
eventually, attaining a profitable level of operations.
It is management's opinion the going concern basis of reporting its financial
condition and results of operations is appropriate at this time. The Company
plans to increase cash flows and take steps towards achieving profitable
operations through mergers and/or acquisition of profitable operations.
F-9
NOTE 7 - COMMITMENTS AND CONTINGENCIES
--------------------------------------
The Company, from time to time, may be subject to legal proceedings and claims
that arise in the ordinary course of its business. The Company is currently
covered adequately for workmen's compensation, business property & casualty
insurance, and general liability meeting the standard limits which are customary
in the industry.
Although there are some contingencies that exist with the Company and its
subsidiaries, there are no new contingencies that have occurred since the last
year-end.
NOTE 8 - MARKETABLE SECURITIES
------------------------------
During the period ended June 30, 2005, the Company was considered to have
sufficient ownership and control of RoboServer Systems Corp. and Net2Auction,
Inc.; therefore both companies are being reported as subsidiaries on a
consolidated basis. Minority interest losses attributed to RoboServer Systems
Corp. and Net2Auction, Inc. are 46% and 47%, respectively.
F-10
ITEM 2. MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING INFORMATION
This quarterly report contains forward-looking statements. For this
purpose, any statements contained herein that are not statements of historical
fact may be deemed to be forward looking statements. These statements relate to
future events or to the Company's future financial performance. In some cases,
you can identify forward-looking statements by terminology such as "may",
"should," "expects," "plans," "anticipates," "believes," "estimates,"
"predicts," "potential," or "continue" or the negative of such terms or other
comparable terminology. These statements are only predictions. Actual events or
results may differ materially. There are a number of factors that could cause
the Company's actual results to differ materially from those indicated by such
forward-looking statements. Although the Company believes that the expectations
reflected in the forward-looking statements are reasonable, it cannot guarantee
future results, levels of activity, performance, or achievements.
GENERAL
The Company's operations for the quarter ending June 30, 2005 were
primarily affected through its subsidiaries, Net2Auction, Inc. ("Net2Auction"),
and Net2Auction Corporation, RoboServer Systems Corp. ("RoboServer"), and
Self-Serve Technologies, Inc. As of June 30, 2005, the Company owned 45.5% of
Net2Auction, which owns 100% of Net2Auction Corporation. Net2Auction is publicly
traded on the NQB Pink Sheets under the symbol of NAUC. As of June 30, 2005, the
Company owned approximately 44.5% of RoboServer, while RoboServer wholly owns
Self-Serve Technologies, Inc. RoboServer is publicly traded on the NQB Pink
Sheets under the symbol RBSY.
4
NET2AUCTION, INC.
Net2Auction has become one of the largest operators of online auction
drop-off locations by developing relationships through partnership agreements
with independently owned and/or franchised pack and ship centers. In order to
assist in growing the operations and increasing revenues, management made the
decision to utilize a proprietary software program that provides an all
encompassing system which ties in eBay, PayPal, Net2Auction, and the customer.
Net2Auction's relationship with EBay allows Net2Auction to reach millions of
potential buyers for our customers' unwanted goods.
Management believes Net2Auction's operations and revenues will continue
to grow whereby increasing revenues each month through the end of 2005 and into
2006, which will bring meaningful revenues for the Company. Currently,
Net2Auction operates forty (40) drop-off locations in San Diego and Orange
County, California. Net2Auction's goal is to have seventy-five (75) drop-off
locations in place by the end of 2005. Net2Auction moved its headquarters in May
2005 to 10979 San Diego Mission Rd., San Diego, CA 92108. To learn more go to
www.net2auction.com.
ROBOSERVER SYSTEMS CORP.
RoboServer continues to explore market opportunities in the restaurant
business and has uncovered several potential markets outside of the traditional
fast food arena. Although the flagship point of sale software remains
potentially a significant module to the main product line of self-service
kiosks, emphasis has migrated from the flagship POS system to new applications
and product models of kiosks. Through market research, management believes the
POS market is near saturation and RoboServer will use all available resources on
the kiosk products. The shift in emphasis to kiosk based ordering systems, while
delaying revenue generation, has uncovered an underserved market.
RoboServer is spending considerable efforts to educate corporate
offices about its Kiosk based customer system. RoboServer has signed its first
pilot site for this new technology and anticipates the deployment of its first
finished product in late summer of 2005. RoboServer believes that within the
next two to three years, 20% to 30% of the fast food restaurants in the United
States will deploy some type of this technology to their retail outlets to
provide customer service plus accrue the benefits in labor cost savings.
Management believes RoboServer's operations and revenues will begin to generate
meaningful revenue prior to December 31, 2005. To learn more go to
www.roboservercorp.com.
WEST TEXAS REAL ESTATE AND RESOURCES, INC.
West Texas did not have any business operations in the second quarter
of 2005.
5
VOIPCOM USA, INC.
Voipcom USA, Inc. did not have any business operations in the second
quarter of 2005.
RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the audited
financial statements and notes thereto included in our annual report on Form
10-KSB for the fiscal year ended December 31, 2004 and should further be read in
conjunction with the financial statements included in this report. Comparisons
made between reporting periods herein are for the three and six-month period
ended June 30, 2005 as compared to the same period in 2004.
Revenues for the second quarter ended June 30, 2005 increased to $
12,849 from $0 in revenues for 2004. The Company's net loss for the quarter
ended June 30, 2005 increased to $609,579 from $488,988 in 2004. The Company's
expenses for the second quarter ended June 30, 2005 as compared to 2004, are set
forth below:
------------------------------------------------------- --------------- -------------
Expenses Quarter ended Quarter
6/30/2005 ended
6/30/2004
------------------------------------------------------- --------------- -------------
------------------------------------------------------- --------------- -------------
General and Administrative 104,478 8,364
------------------------------------------------------- --------------- -------------
------------------------------------------------------- --------------- -------------
Consulting 388,102 423,283
------------------------------------------------------- --------------- -------------
------------------------------------------------------- --------------- -------------
Employee Salaries and Bonuses 35,000 25,000
------------------------------------------------------- --------------- -------------
------------------------------------------------------- --------------- -------------
Interest Expense 27,740 0
------------------------------------------------------- --------------- -------------
------------------------------------------------------- --------------- -------------
Legal and Professional 85,425 47,341
Research and development 50,468
Cost of goods sold 62,554
------------------------------------------------------- --------------- -------------
------------------------------------------------------- --------------- -------------
Total Expenses 753,767 503,988
------------------------------------------------------- --------------- -------------
The increase in these expenses for the second quarter of 2005 relative
to the same period for 2004 is primarily related to an increase in non-cash
services of $325,027.
LIQUIDITY AND CAPITAL RESOURCES
The Company's net cash used in operating activities for the six months
ended June 30, 2005 increased to $273,484 from net cash provided by operating
activities of $5,876 for the same period in 2004. This increase is mainly
attributable to a decrease in expense from non-cash services through the
issuance of stock to $585,582 for the six months of 2005 from $683,451 for the
six months of 2004, and an increase in net loss of $989,010 for the six months
ended June 30, 2005, compared to a net loss of $742,972 for the six months ended
June 30, 2004.
Net cash used in investing activities increase to $187,514 for the
six-months ended June 30, 2005, up from $0 for the same period in 2004. This
increase is due to the purchase of Voipcom USA, Inc.
6
Net cash provided by financing activities was $737,033 for six-months
ended June 30, 2005, compared to $0 for the same period in 2004. This increase
is due to increased borrowing and the issuance of common stock.
The Company has relied upon its chief executive officer for its capital
requirements and liquidity. The Company's recurring losses, lack of cash flow
and lack of cash on hand raise substantial doubt about the Company's ability to
continue as a going concern. Management's plans with respect to these matters
include raising additional working capital through equity or debt financing and
acquisitions of ongoing concerns, which generate profits, ultimately allowing
the Company to achieve consistent profitable operations. The accompanying
financial statements do not include any adjustments that might be necessary
should the Company be unable to continue as a going concern.
ITEM 3. CONTROLS AND PROCEDURES
Within the 90 days prior to the date of this report, the Company
carried out an evaluation, under the supervision and with the participation of
the Company's management, including the Company's Chief Executive Officer and
the person performing functions similar to that of a Principal Financial Officer
of the Company, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures pursuant to Exchange Act Rule
13a-15. Based upon the evaluation, the Company's Chief Executive Officer and the
person performing functions similar to that of a Principal Financial Officer of
the Company concluded that the Company's disclosure controls are effective in
timely alerting them to material information relating to the Company (including
its consolidated subsidiaries) required to be included in the Company's periodic
SEC filings. There have been no significant changes in the Company's internal
controls or in other factors which could significantly affect internal controls
subsequent to the date the Company conducted its evaluation.
PART II - OTHER INFORMATION
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Although the Company did not issue any of its own common stock during
the quarter ended June 30, 2005, two of the Company's subsidiaries, RoboServer
and Net2Auction, did issue common stock in unregistered offerings. Because we
have consolidated our financial statements to include RoboServer and
Net2Auction, the following is a disclosure of their equity issuances during the
second quarter.
On or about April 19, 2005, Roboserver issued 165,000 shares of common
stock as consideration for consulting services rendered. On or about
June 28, 2005, Roboserver issued 30,000 shares of common stock in conjunction
with the private placement of securities. On or about June 29, 2005, Roboserver
issued 410,000 shares of common stock in conjunction with the conversion of a
loan. Additionally, Net2Auction, on or about May 13, 2005, issued 1,000,000
hares in conjunction with a private placement of securities, and on or about
June 23, 2005, Net2Auction issued an additional 5,000,000 shares of common stock
following the exercise of options by Net2Auction option holders. The securities,
which were taken for investment and were subject to appropriate transfer
restrictions, were issued without registration under the Securities Act upon the
exemption provided in Section 4(2) of the Securities Act and Regulation D.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits required to be attached by Item 601 of Regulation S-B
are listed in the Index to Exhibits beginning on page 8 of this Form 10-QSB,
which is incorporated herein by reference.
7
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
has caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
AMERIRESOURCE TECHNOLOGIES, INC.
/s/ Delmar A. Janovec
----------------------------------------------
Delmar A. Janovec, Chief Executive Officer and
Principal Financial Officer
Dated: August 22, 2005
8
INDEX TO EXHIBITS
EXHIBIT PAGE
NO. NO. DESCRIPTION
3(i) * Articles of Incorporation of the Company.
(Incorporated by reference from the
Company's Form S-4, file number 33-44104,
effective on February 11, 1992.).
3(ii) * Bylaws of the Company. (Incorporated by
reference from the Company's Form S-4, file
number 33-44104, effective on February 11,
1992.)
31(i) 10 Certification of Chief Executive Officer
and Principal Financial Officer under
Section 302 of the Sarbanes-Oxley Act of 2002.
32(i) 11 Certification of Chief Executive Officer and
Principal Financial Officer Pursuant to 18
U.S.C. ss.1350
* Previously filed as indicated and incorporated herein by reference from the
referenced filings previously made by the Company.
9
EXHIBIT 31(i)
CERTIFICATION
I, Delmar Janovec, as Chief Executive Officer and the person performing
functions similar to that of a Principal Financial Officer of AmeriResource
Technologies, Inc. (the "Company"), certify that:
1. I have reviewed this quarterly report on Form 10-QSB of the Company;
2. Based on my knowledge, this annual 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 annual report;
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the small business issuer as of, and for, the periods
presented in this annual report;
4. The small business issuer's other certifying officer(s) and I am
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
and internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and
have:
(a) designed such disclosure controls and procedures or caused such
disclosure controls and procedures to be designed under my supervision,
to ensure that material information relating to the small business
issuer, including its consolidated subsidiaries, is made known to
myself by others within those entities, particularly during the period
in which this annual report is being prepared;
(b) designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under my
supervision, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting
principles;
(c) evaluated the effectiveness of the small business issuer's disclosure
controls and
procedures and presented in this report my conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
(d) disclosed in this report any change in the small business issuer's
internal controls over financial reporting that occurred during the
small business issuer's most recent fiscal year that has materially
affected, or is reasonably likely to materially effect, the small
business issuer's internal controls over financial reporting; and
5. The small business issuer's other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the small business issuer's auditors and the
audit committee of the small business issuer's board of directors;
(a) all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonable likely to adversely affect the small business issuer's
ability to record, process, summarize and report financial information;
and
(b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the small business issuer's
internal control over financial reporting
Date: August 22, 2004
/s/ Delmar A. Janovec
--------------------------
Delmar Janovec
Chief Executive Officer and
Principal Financial Officer
10
EXHIBIT 32 (i)
CERTIFICATION PURSUANT TO 18 U.S.C. SECTIONS 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACTS OF 2002
Certification Pursuant to 18 U.S.C., Section 1350, as Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
In connection with the Quarterly Report of AmeriResource Technologies,
Inc. (the "Company") on Form 10-QSB for the quarter ended June 30, 2004 (the
"Report"), as filed with the Securities and Exchange Commission, on the date
hereof (the "Report), the undersigned, Delmar Janovec, Chief Executive Officer
and the person performing functions similar to that of a Principal Financial
Officer of the Company, hereby certifies, pursuant to 18 U.S.C. 1350, as adopted
pursuant to 18 U.S.C., Section 1350, that:
(1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.
/s/ Delmar A. Janovec
Dated: August 22, 2004 ---------------------
Delmar A. Janovec
Chief Executive Officer and
Principal Financial Officer
11