-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, F6wAIMqnYSf03FxV1DiQSmqxQnKml8ncCaXjL6IxWxlSqYObJO+WDMm635UU9Riw 9Nfl6/b9Dn+3pM05Dik1pA== 0001042910-99-001528.txt : 19991117 0001042910-99-001528.hdr.sgml : 19991117 ACCESSION NUMBER: 0001042910-99-001528 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991115 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN ACCESS TECHNOLOGIES INC CENTRAL INDEX KEY: 0001043186 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 593410234 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-24575 FILM NUMBER: 99755911 BUSINESS ADDRESS: STREET 1: 37 SKYLINE DR STREET 2: SUITE 1101 CITY: LAKE MARY STATE: FL ZIP: 32746 BUSINESS PHONE: 4078657696 10-Q 1 QUARTERLY REPORT Form 10-QSB for AMERICAN ACCESS TECHNOLOGIES, INC. filed on November 15, 1999 SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-QSB [XX] Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 1999 OR [ ] Transition Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 For the transition period from ______________ to ________________ * * * * * * * * * * * * * * * * * * * * * * Commission File No. 000-24575 AMERICAN ACCESS TECHNOLOGIES INC. A Florida corporation (Exact name of registrant as specified in charter, and state incorporated) * * * * * * * * * * * * * * * * * * * * * * Employer Identification No. 59-3410234 Lake Mary Florida, 37 Skyline Drive Suite 1101 (Address of principal executive offices of registrant) (407) 333-1446 (Registrant's telephone number, including area code) * * * * * * * * * * * * * * * * * * * * * * Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 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 AMERICAN ACCESS TECHNOLOGIES INC. Common Stock (Par Value $0.001) outstanding at September 30, 1999 was 4,063,700. AMERICAN ACCESS TECHNOLOGIES, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS
Audited Financial ASSETS 30-Sep-99 Statements ------ UNAUDITED Dec. 31, 1998 --------- ------------- Current Assets: Cash and cash equivalents $ 471,877 $ 637,776 Investments 2,796,561 2,825,177 Accounts receivable, net of allowance 1,346,623 806,960 Note receivable, related party 500,000 500,000 Inventories 347,095 297,440 Prepaid expenses and other current assets 235,812 60,466 Cost in excess of contract sales 346,598 -- ----------- ----------- Total current assets 6,044,566 5,127,819 Property, Plant and Equipment, net of accumulated depreciation 1,447,593 1,313,630 Building Under Construction 823,568 Patent Costs 63,075 34,962 Total assets $ 8,378,801 $ 6,476,411 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Current Liabilities: Line of credit $ 75,746 $ 296,002 Accounts payable and accrued expenses: Compensation due to officers/directors/stockholders 13,432 111,235 Other 288,716 355,390 ----------- ----------- Total current liabilities 377,894 762,627 ----------- ----------- Deferred Income Taxes 69,000 69,000 Stockholders' Equity: Series A 10% Senior Convertible Preferred stock, $.001 par value; authorized 1,000,000 shares; issued and outstanding 11,239 and 50,000 respectively shares at liquidation value 1,123,900 5,000,000 Common stock, $.001 par value; authorized 10,000,000 shares; issued and outstanding 4,061,900 and 3,265,470 respectively shares 4,053 3,265 Additional paid-in capital 7,829,687 1,512,625 Unrealized losses on securities held for investment (100,517) Deficit (925,215) (871,106) ----------- ----------- Total stockholders' equity 7,931,908 5,644,784 ----------- ----------- Total liabilities and stockholders' equity $ 8,378,802 $ 6,476,411 =========== ===========
See accompanying notes to financial statements AMERICAN ACCESS TECHNOLOGIES, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS Unaudited
Nine Months Nine Months Three Months Three Months Ended Ended Ended Ended 30-Sep-99 9/30/1998 30-Sep-99 30-Sep-98 --------- --------- --------- --------- Net Sales Formed metal $ 3,076,368 $ 3,139,564 $ 968,159 $ 1,196,380 Zone cabling termination cabinet 1,031,203 479,999 316,455 162,948 ----------- ----------- ----------- ----------- Total Net Sales 4,107,571 3,619,563 1,284,614 1,359,328 ----------- ----------- ----------- ----------- Costs and Expenses: Cost of sales 1,748,673 1,725,103 611,805 635,551 Selling, general and administrative 2,266,525 1,944,704 731,585 682,422 ----------- ----------- ----------- ----------- Total Cost and Expenses 4,015,198 3,669,807 1,343,390 1,317,973 ----------- ----------- ----------- ----------- Net Operating Income (Loss) 92,373 (50,244) (58,776) 41,355 ----------- ----------- ----------- ----------- Other Income (Expense): Interest income 273,274 13,091 120,817 6,823 Interest expense (16,875) (102,649) (3,496) (34,214) Other income 50,699 233,363 13,864 4,758 ----------- ----------- ----------- ----------- Total Other Income (Expense) 307,098 143,805 131,185 (22,633) ----------- ----------- ----------- ----------- Net Income Before Taxes 399,471 93,561 72,409 18,722 ----------- ----------- ----------- ----------- Income Taxes (Credit) (15,170) ----------- ----------- ----------- ----------- Net Income 414,641 93,561 72,409 18,722 =========== =========== =========== =========== Net Income Per Common Share $ (0.05) $ (0.05) $ 0.02 $ (0.02) =========== =========== =========== ===========
See accompanying notes to financial statements AMERICAN ACCESS TECHNOLOGIES, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS UNAUDITED
Nine Nine Months Months Ended Ended 09/30/99 09/30/98 -------- -------- Cash Flows from Operating Activities: Net Income $ 414,641 $ 93,562 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 232,171 224,690 Changes in operating assets and liabilities: (Increase) decrease in: Accounts receivable (539,663) (394,837) Inventories (49,655) 23,734 Prepaid expenses and other assets (175,346) 160,016 Costs in excess of contract sales (346,599) -- Increase (decrease) in: Compensation due to officers/directors/stockholders (97,803) 616,684 Accounts payable and accrued expenses (66,675) (426,348) ----------- ----------- Net cash provided by operating activities (628,929) 297,501 ----------- ----------- Cash Flows from Investing Activities: (Increase) Decrease Notes Receivable -- (500,000) Proceeds from investment changes (34,840) -- Patent costs (28,113) (26,217) Acquisition of property and equipment (net of sales and retirements) (366,132) (31,208) Costs for building under construction (823,568) -- ----------- ----------- Net cash provided by investing activities (1,252,653) (557,425) ----------- ----------- Cash Flows from Financing Activities: Proceeds from issuance of common Stock 1,935,939 480,000 Proceeds from line of credit (220,256) -- Payments on loans and capital lease obligations -- -- ----------- ----------- Net cash used in financing activities 1,715,683 480,000 ----------- ----------- Net Increase (Decrease) in Cash and Cash Equivalents (165,899) 220,076 Cash and Cash Equivalents, Beginning 637,776 638,134 ----------- ----------- Cash and Cash Equivalents, Ending $ 471,877 $ 858,210 =========== =========== Supplemental Disclosure of Cash Flow Information: Cash paid for interest $ 16,875 $ 102,649 =========== ===========
See accompanying notes to financial statements AMERICAN ACCESS TECHNOLOGIES, INC. NOTES TO FINANCIAL STATEMENTS September 30, 1999 Unaudited 1. Basis of Presentation The accompanying unaudited consolidated condensed financial statements at September 30, 1999 have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and reflect all adjustments which, in the opinion of management, are necessary for a fair presentation of financial position as of September 30, 1999 and results of operations for the three and nine months ended September 30, 1999 and 1998. All adjustments are of a normal recurring nature. The results of operations for interim periods are not necessarily indicative of the results to be expected for a full year. The statements should be read in conjunction with the consolidated financial statements and footnotes thereto for the year ended December 31, 1998 included in the company's Registrations Statement Form SB-2 filing and 10-KSB. 2. Nature of Business and Summary of Significant Accounting Policies. BUSINESS American Access Technologies, Inc. develops specialized products for the telecommunications industry. The company manufactures and distributes several models of Zone Cabling Termination Cabinets to the telecommunications industry. The product helps manage and route wiring and cabling used in voice, computer and data transmission systems throughout the world. Omega Metals, Inc., a wholly-owned subsidiary of American Access, shears and molds metal and manufactures metal-formed products for customers principally in Florida and Georgia. Omega manufactures the company's product. On August 17, 1999, American Access acquired the equipment, outstanding sales agreements and quotes, inventory, goodwill and product name and logo, and the company website for Genco, Inc., a manufacturer of generator enclosures, for $550,000 in legended AATK common stock at $20 per share and forgiveness of all accounts receivable that exist to Omega Metals. The Company currently is fulfilling backorders in excess of $550,000. American Access also is installing a powder coating system that was purchased for $375,000. To date, booked orders in-house for the process are in excess of $1.5 million. COMMON STOCK The Registration Statement on April 6 became effective for the Series A 10% Senior Convertible Preferred Stock, of which there were 50,000 shares outstanding at a gross of $5,000,000. Through September 30, 1999, 78.3% of the preferred stock, $3,876,100 has been converted resulting in 288,456 common stock shares being issued. A total of 286,511 shares were sold on the open market. American Access Technologies trades on the Nasdaq Stock Market, Inc., as a Small Cap listing. The Registration Statement on April 7 became effective for the offering of 720,000 shares of common stock upon the exercise of 720,000 $8 warrants. At the beginning of the quarter ending September 30, 1999 there were 86,750 unexercised warrants. During the quarter ending September 30, 1999, 33,375 were exercised, leaving a balance of 53,375. NET LOSS PER COMMON SHARE In 1997, the Company adopted Statements of Financial Accounting Standards (SFAS) No. 128, "Earnings per Share" which requires the presentation of both basic and diluted earnings (loss) per share. Basic net loss per common share has been computed based upon the weighted average number of shares of common stock outstanding during the periods. The computation of earnings per share is reflected in the following schedule:
Computation of Net Loss Per Common Share Nine Months Ended Three Months Year Ended Sept. 30, 1999 Ended Sept. Dec. 31, 1998 30, 1999 Net Income (Loss) $ 342,237 $ 138,395 $ (492,814) Cumulative Preferred Stock Dividend (61,195) (61,195) (104,167) Beneficial Conversion Preferred Stock (468,750) ---------- Dividend (781,250) ----------- $ (187,708) $ 77,200 $(1,378,231) ----------- ----------- ----------- Weighted Average Common Shares 3,450,539 3,633,575 2,992,500 Outstanding Common Shares Issued to Acquire Omega Metals, Inc. 226,470 ------------ Total Weighted Average Number Common Shares and 3,450,539 3,633,575 3,218,970 ----------- --------- ------------ Equivalent Net Loss per Common $ (.05) $ .02 $ (.43) ----------- ---------- ------------ Share
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION NINE MONTHS ENDED SEPT. 30, 1999 COMPARED WITH THE NINE MONTHS ENDED SEPT. 30, 1998 REVENUES Revenues for the nine months ended September 30, 1999 increased by $665,332 or 29.4% to $2,925,567 as compared to $2,260,235 for the nine months ended September 30, 1998. The parent company, American Access Technologies, Inc., was still in the development stage for the third quarter ended September 30, 1998, and revenues were only $317,051 . In 1999 for the nine months ended September 30, revenues increased by $397,696 to $714,747. The company's subsidiary, Omega Metals Inc., also had an increase in revenues of $267,636. COSTS AND EXPENSES Direct costs represent the cost incurred by the Company to have its products manufactured and assembled. These costs represented 42.4% of revenues for the nine months ended September 30, 1999, and 48.2% of revenues for the nine months ended September 30, 1998. The decrease is attributed to a change in the customer mix. Revenues generated during the nine month period ended September 30, 1999 required less direct labor and material costs per sales dollar than for the previous year's nine months ended September 30, 1998. Selling, General and Administrative expenses increased by $272,658 to $1,534,940 for the nine months ended September 30, 1999 compared to $1,262,282 for the nine months ended September 30, 1998. This increase was the result of costs associated with the continued growth of the company including marketing and promotional costs, management costs, and professional fees associated with the required SEC filings. Startup costs related to the company's Building Industry Consulting Service International (BICSI) licensed training agreements school have also been expensed as incurred. LIQUIDITY AND CAPITAL RESOURCES The Company's operating activities utilized cash of $409,355 during the nine months ended September 30, 1999 as compared to providing $180,796 during the nine months ended September 30, 1998. The Company's operating and capital requirements in connection with its operations have been and will continue to be significant. Based on its current plans, the Company anticipates that revenues earned from product sales will be the primary source of funds for operating activities. The Company believes that these revenues in addition to existing cash and cash equivalents remaining from proceeds of it private offering, and cash received from the exercise of warrants will be sufficient to meet its capital and liquidity needs for the next 12 months. The Company also believes that resources required to fulfill purchase orders will be available through bank borrowings or factoring, if required. The company's primary customers are established corporations with credit ratings that will support such credit arrangements. Management's plans include the following: 1. The Company has arranged for marketing in association with manufacturers and distributors of telecommunications equipment, which will enable the Company to obtain orders for its products with a minimal expenditure of the Company's resources. The Company has launched a manufacturer's rep program to assist in the distribution of its products. The web site presence maintained by the Company is being enhanced to provide critical installation instructions and more comprehensive information about our product. 2. The Company has arranged for uninterrupted manufacture of its products by purchasing the manufacturer in October, 1998, in order to minimize the financial requirements necessary for production. We are expanding the job base at our wholly-owned subsidiary Omega Metals, and have increased plant capacity in an expansion. Backorders acquired in the $550,000 purchase of Genco, Inc. assets, total in excess of the purchase price of the assets. The $375,000 expenditure for a powder coating system, currently being installed, has already generated in excess of $1.5 million in orders for the process. 3. The Company believes that it can acquire working capital through sale of additional securities (including exercise of outstanding warrants), or borrowings, including bank borrowing, in view of the nature of its customer base. Nevertheless, the Company continues to be subject to a number of risk factors, including the uncertainty of market acceptance for its product line, the need for additional funds, competition, and technological obsolescence. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS On September 17, 1999, a class action complaint was filed against the company and its primary market maker Capital International Securities Group, in United States District Court, Eastern District of New York, prompted by the stock's price decline in August, 1999. The company has retained the law firm of Foley & Lardner to litigate the matter. ITEM 2: CHANGES IN SECURITIES AND USE OF PROCEEDS COMMON STOCK The Registration Statement on April 6 became effective for the Series A 10% Senior Convertible Preferred Stock, of which there were 50,000 shares outstanding at a gross of $5,000,000. Through September 30, 1999, 78.3% of the preferred stock, $3,876,100 has been converted resulting in 288,456 common stock shares being issued. A total of 286,511 shares were sold on the open market. American Access Technologies trades on the Nasdaq Stock Market, Inc., as a Small Cap listing. The Registration Statement on April 7 became effective for the offering of 720,000 shares of common stock upon the exercise of 720,000 $8 warrants. At the beginning of the quarter ending September 30, 1999 there were 86,750 unexercised warrants. During the quarter ending September 30, 1999, 33,375 were exercised, leaving a balance of 53,375. ITEM 5: OTHER INFORMATION In September, 1998, the Company , loaned $500,000 to Universal Beverages Holdings Corp., a bottled water company. John Cooney, a director of the Company, is also a director and shareholder of Universal Beverages. The secured loan provides for interest at 15% per annum. Universal Beverage is in the process of recapitalization. However, the loan is currently in default. On August 3, 1999, American Access Technologies, Inc. and Herman Miller, Inc. entered into a contract for an alliance to jointly promote the use of American Access Technologies, Inc products in Herman Miller Ethospace and Systems Bridge products. On August 17, 1999, American Access acquired the equipment, outstanding sales agreements and quotes, inventory, goodwill and product name and logo, and the company website for Genco, Inc., a manufacturer of generator covers, for $550,000 in legended AATK common stock at $20 per share and forgiveness of all accounts receivable that exist to Omega Metals. The Company currently is fulfilling backorders in excess of $550,000. On September 10, 1999, American Access purchased for $350,000 a powder coating system that will expand the Company's customer base and ensure highest quality finish work. The system is currently being installed at the Company's expanded production site in Keystone Heights. To date, booked orders in-house for the process are in excess of $1.5 million. ITEM 6: EXHIBITS AND REPORTS (a) EXHIBITS The following exhibits are being filed as part of this report:
EXHIBIT NO. DESCRIPTION ----------- ----------- Material Contracts (Incorporated by Reference to 10.0 Exhibit 10.0 filed on Form 10-QSB Filed August 16, 1999.) 27.0 Financial Data Schedule (b) REPORTS on FORM 8-K The Company on October 19, 1999, filed an 8-K disclosing the pending class action lawsuit and the resignation of two directors, herewith incorporated by reference.
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: August 16, 1999 AMERICAN ACCESS TECHNOLOGIES, INC. (Registrant) By: /s/ Bobby Story ---------------------------------------- Bobby Story Acting Chief Financial Officer By: /s/ John E. Presley ---------------------------------------- John E. Presley President EX-27 2 FDS --
5 3-MOS DEC-31-1999 JAN-01-1999 JUN-30-1999 587,392 3,450,738 1,282,887 28,000 339,243 6,486,861 2,863,327 (1,567,152) 8,360,519 635,558 0 0 5,000,000 4,021 6,428,040 8,360,519 2,925,567 2,925,567 1,239,478 2,774,418 0 0 13,374 327,067 (15,170) 343,006 0 0 0 343,006 0.02 0.02
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