As filed with the Securities and Exchange Commission on October 24, 2001
Registration No. _______________
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
Amended
QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
------------------------------------------------
For quarter ended June 30, 2001
Commission File Number 0-29195
NEW MILLENNIUM MEDIA INTERNATIONAL, INC.
(Name of Small Business Issuer in Its Charter)
Colorado (7310) 84-1463284
--------------------------------------------------------------------------------
(State or jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
200 9th Avenue North, Suite 210
Safety Harbor, Florida 34695
(727) 797-6664
--------------
(Address and Telephone Number of Principal Executive Offices
and Principal Place of Business)
John D. Thatch, President
New Millennium Media International, Inc.
200 9th Avenue North, Suite 210
Safety Harbor, Florida 34695
(Name, Address and Telephone Number of Agent for Service)
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
--- ---
As of June 30, 2001 there were 7,116,863 shares of the Company's common stock
issued and outstanding.
NEW MILLENNIUM MEDIA INTERNATIONAL, INC.
INDEX
Page
----
Part I Financial Information ........................................... 5
Financial Statements ........................................ 5
Condensed Balance Sheet ..................................... 5
Condensed Statement of Operations ........................... 6
Condensed Statement of Cash Flows ........................... 7
Notes to the Condensed Financial Statements ................. 8
Management's Discussion and Analysis of
Financial Condition and Results of Operations .......... 9
Overview .................................................... 9
Liquidity and Capital Resources ............................. 9
Results of Operations ....................................... 10
General and Administrative .................................. 11
Net Loss .................................................... 11
Trends and Events ........................................... 11
Quantitative and Qualitative Disclosures
About Market Risk ........................................... 12
Part II Other Information ............................................... 12
Legal Proceedings ........................................... 12
Changes in Securities and Use of Proceeds ................... 12
Common Stock ................................................ 12
Defaults Upon Senior Securities ............................. 13
Submission of Matters to a Vote of Security Holders ......... 13
Other Information ........................................... 13
Exhibits and Reports on Form 8-K ............................ 13
Signatures ................................................................ 13
NEW MILLENNIUM MEDIA INTERNATIONAL, INC.
CONDENSED BALANCE SHEET
June 30, December 31,
2001 2000
(Unaudited) (Audited)
(Restated) (Restated)
------------ ------------
ASSETS
Current Assets
Cash $ 18,288 $ --
Accounts Receivable 131,575 16,636
Inventories 3,255 3,255
Prepaid Assets 10,972 9,096
------------ ------------
Total Current Assets 164,090 28,987
------------ ------------
Furniture and Equipment-Net 887,279 924,148
------------ ------------
Other Assets
Other Assets -- --
Goodwill, net of accumulated amortization
of $90,389 and $67,793, respectively, 2001 and 2000 587,705 610,301
------------ ------------
Total Other Assets 587,705 610,301
------------ ------------
$ 1,639,074 $ 1,563,436
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses $ 186,148 $ 155,118
Notes payable 250,000 --
Related payables 753,996 658,110
------------ ------------
Total Current Liabilities 1,190,144 813,228
------------ ------------
Long-term Liabilities -- --
Stockholders' Equity
Common stock, par value $.001; 15,000,000 (restated - see note 3)
shares authorized; 7,116,863 and 5,688,123 (restated - see note 3)
shares issued and outstanding, respectively, 2001 and 2000 7,117 5,690
Common stock warrants (200,000 issued and outstanding; exercisable
at $1.50 expiring March 21, 2005) (restated - see note 3) 57,200 57,200
Preferred stock, par value $.001; shares authorized, 10,000,000
no shares issued and outstanding -- --
Additional paid in capital 3,782,703 2,769,445
Accumulated Deficit (2,523,090) (2,082,127)
------------ ------------
1,323,930 750,208
Less common stock subscribed (875,000) --
------------ ------------
Total Stockholders' Equity 448,930 750,208
------------ ------------
$ 1,639,074 $ 1,563,436
============ ============
NEW MILLENNIUM MEDIA INTERNATIONAL, INC.
CONDENSED STATEMENT OF OPERATIONS
(Unaudited)
For the For the For the For the
Quarter Quarter Six Months Six Months
Ended Ended Ended Ended
6/30/01 6/30/00 6/30/01 6/30/00
(Restated) (Restated) (Restated) (Restated)
------------ ------------ ------------ ------------
Income $ 74,991 $ 1,044 $ 218,741 $ 1,044
Costs and Expenses:
General and administrative $ 309,091 $ 256,712 $ 562,729 $ 358,589
Interest expense 15,559 16,000 26,743 32,000
Depreciation and amortization 35,116 6,068 70,232 12,066
------------ ------------ ------------ ------------
Total costs and expenses 359,766 278,780 659,704 402,655
------------ ------------ ------------ ------------
Loss from Operations (284,775) (277,736) (440,963) (401,611)
------------ ------------ ------------ ------------
Net Loss $ (284,775) $ (277,736) $ (440,963) $ (401,611)
============ ============ ============ ============
Basic and Fully Diluted Loss Per Common Share $ (0.043) $ (0.060) $ (0.069) $ (0.085)
============ ============ ============ ============
Weighted Average Number of Shares Outstanding 6,556,863 4,615,892 6,403,493 4,717,934
============ ============ ============ ============
NEW MILLENNIUM MEDIA INTERNATIONAL, INC.
CONDENSED STATEMENT OF CASH FLOWS
(Unaudited)
For the For the For the For the
Quarter Quarter Six Months Six Months
Ended Ended Ended Ended
6/30/01 6/30/00 6/30/01 6/30/00
(Restated) (Restated) (Restated) (Restated)
---------- ---------- ---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (284,775) $ (277,736) $ (440,963) $ (401,611)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization 35,116 6,068 70,232 12,066
Fair value of shares issued for services 25,000 -- 76,685 2,500
Fair value of warrants issued to investment bankers -- 57,200 -- 57,200
(Increase) decrease in accounts receivable (38,706) -- (114,939) --
(Increase) decrease in inventories -- -- -- (18,750)
(Increase) decrease in prepaid expenses (1,876) (1,215) (1,876) (6,215)
Increase (decrease) in accounts payable
and accrued expenses 36,464 42,772 79,916 12,374
Increase (decrease) in related party payables
---------- ---------- ---------- ----------
Net cash provided by (used in) operating activities (228,777) (172,911) (330,945) (342,436)
---------- ---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets (6,062) (1,626) (10,767) (5,083)
---------- ---------- ---------- ----------
Net provided by (used in) investing activities (6,062) (1,626) (10,767) (5,083)
---------- ---------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable - Related 250,000 -- 310,000 15,000
Proceeds from common stock transactions -- 19,000 50,000 460,000
---------- ---------- ---------- ----------
Net cash provided by (used in) financing activities 250,000 19,000 360,000 475,000
---------- ---------- ---------- ----------
Increase (Decrease) in cash and cash equivalents $ 15,161 $ (155,537) $ 18,288 $ 127,481
Cash and cash equivalents at beginning of period 3,127 285,081 -- 2,063
---------- ---------- ---------- ----------
Cash and cash equivalents at end of period $ 18,288 $ 129,544 $ 18,288 $ 129,544
========== ========== ========== ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for interest -- -- -- --
Cash paid during the year for income taxes -- -- -- --
Supplemental schedule of noncash investing
and financing activities:
Fair value of shares issued (500,000 shares)
for goodwill of Scovel Management, Inc. $ -- $ -- $ -- $ 500
Fair value of shares issued (20,000 shares)
for amounts previously owed to secretary/treasurer 13,000 -- 13,000 --
NEW MILLENNIUM MEDIA INTERNATIONAL, INC.
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. Organization and Basis of Presentation
--------------------------------------
The accompanying unaudited condensed financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information in accordance with rules and regulations of
the Securities and Exchange Commission, including Rule 301(b) of Regulation
SB and instructions to Form 10-Q. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements and should be read in
conjunction with the Company's Annual Report (Form 10-KSB) for the year
ended December 31, 2000. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. The results of operations for the six
months ended June 30, 2001 are not necessarily indicative of the operating
results for the full fiscal year or any future period.
2. Going Concern Uncertainty
-------------------------
The financial statements are presented assuming the Company will continue
as a going concern. The Company has incurred recurring operating losses and
negative cash flows and has negative working capital. The Company has
financed itself primarily through the sale of its stock and related party
borrowings. These conditions raise substantial doubt about the Company's
ability to continue as a going concern.
There can be no assurance that the Company will be successful in
implementing its plans, or if such plans are implemented, that the Company
will achieve its goals.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern and do not include any adjustments
to reflect the possible future effect on the recoverability and
classification of assets or the amount and classification of liabilities
that might result from the outcome of this uncertainty.
3. Equity Transactions
-------------------
As approved at a Special Meeting of Stockholders on May 7, 2001, the
Company reverse split its common stock on a basis of 1 for 5 with a
resulting decrease in the number of common stock authorized to 15,000,000
shares. The Company has restated its financial statements to reflect this
common stock reverse split.
On June 4, 2001, the Company issued and held stock for consulting services
to be rendered to the Company (500,000 shares at $1.00 and 500,000 shares
at $.75).
4. Restatement information
-----------------------
Fair value of shares issued as indicated in accordance with FASB No. 123 as
restated consists of:
AMOUNT - RESTATED
--------------------------------------------
QUARTER ENDED SIX MONTHS ENDED
NO. OF -------------------- --------------------
DESCRIPTION SHARES 6/30/01 6/30/00 6/30/01 6/30/00
-------------------------------------------- -------- -------- -------- -------- --------
Shares issued to John D. Thatch for $.005
per share in consideration of accepting
officer/stockholder employment - net
of rescission 500,000 $ -- $ -- $ -- $ 2,500
Shares issued to San Rafael Consulting Group
for $.25 per share for consulting services 600 -- -- 150 --
Shares issued to E-Vision LED Inc. for $.25
per share for consulting services 6,140 -- -- 1,535 --
Shares issued to Tim Daley for $.25
per share for consulting services 200,000 -- -- 50,000 --
Shares issued to Ray Oliver for $.25
per share for consulting services 100,000 25,000 -- 25,000 --
-------- -------- -------- -------- --------
806,740 $ 25,000 $ -- $ 76,685 $ 2,500
======== ======== ======== ======== ========
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
GENERAL
Management's discussion and analysis contains various "forward looking
statements." Such statements consist of any statement other than a recitation of
historical fact and can be identified by the use of forward-looking terminology
such as "may," "expect," "anticipate," "estimate," or "continue" or use of
negative or other variations or comparable terminology.
We caution that these statements are further qualified by important factors that
could cause actual results to differ materially from those contained in the
forward-looking statements, that these forward-looking statements are
necessarily speculative, and there are certain risks and uncertainties that
could cause actual events or results to differ materially from those referred to
in such forward-looking statements.
OVERVIEW
The Company is no longer a development stage company as defined in Statement of
Financial Accounting Standards No. 7, "Accounting and Reporting by Development
Stage Enterprises." We have generated our cash needs through equity financings
and loans from officers and stockholders. As an operational stage company, we
have devoted substantially all of our efforts in securing and establishing new
businesses. We have engaged in limited activities in the advertising business,
but no significant revenues have been generated to date. The primary activity of
the Company currently involves several types of visual advertising: The
Illumisign-Eyecatcher front-lit movable display board, "EyeCatcher Powered by
Insight" back-lit movable display boards, plasma screens and LED display boards.
We retain ownership of all types of the machines and sell the advertising space
on a monthly basis. The Company is continuing to devote substantially all of its
present efforts to implementing its operational and marketing plans designed to
establish new business accounts for its mobile LED boards and the motion display
boards. Through much of the first quarter of 2001 the Company has been
negotiating with Carson Jensen Anderson Enterprises, Inc. d/b/a EyeCatcherPlus,
the Company's marketing affiliate, to take over in-house all future marketing
activity. As a result, the Company will conduct all marketing in-house, but will
continue to use the EyeCatcherPlus logo, marketing material and website. We feel
that this decision will have the net effect of "cutting out the middle man" and
increasing Company revenues.
LIQUIDITY AND CAPITAL RESOURCES
Since inception, we have funded our operations and investments in equipment
through cash from operations, equity financings and borrowing from related
parties that are not necessarily isolated transactions; however, there is no
assurance that there will be proceeds from such transactions in the future.
Our cash and cash equivalents were $129,544 at the six months ending June 30,
2000 compared to $18,288 for the same period in 2001, a decrease of $111,256.
Generally, the Company has been funded by proceeds from common stock
transactions that are not necessarily isolated transactions; however, there is
no assurance that there will be proceeds from common stock transfers in the
future.
On May 19, 2000 the Company entered into an investment agreement with Swartz
Private Equity, LLC to raise up to $25 million through a series of sales of
common stock. The dollar
amount of each sale is limited by the trading volume and a minimum period of
time must occur between sales. In order to sell shares to Swartz, there must be
an effective registration statement on file with the SEC covering the resale of
the shares by Swartz and we must meet certain other conditions. The agreement is
for a three-year period ending May 2003. A detailed description of the Swartz
equity line agreements can be found in the SB-2 Registration Statement filed
September 13, 2000.
Our net loss has not changed dramatically from the first six months of 2000
($401,611) to the same period of 2001 ($440,963), an increase of 9.8%. These
same two comparative terms show a 3.36% decrease in Net Cash Used in Operating
Activities, from $342,436 to $330,945. Management feels that this is the result
of a increase in net operating loss with an increase in accounts receivable of
$114,939 net of an increase in payables of $78,040 in 2001. It is further felt
that these two contributing factors are a direct consequence of a steady
increase in business activity, i. e., as the business increases so do the
receivables and payables. The increased business activity are the result of a
steady increase in the number of events for which the mobile LED display unit is
being booked as well as the increase in the number of display boards being
placed which, in turn, increases the amount of artwork being produced by the
Company graphic arts department. These three units of the Company, display
boards, LED screens and graphic arts, are the revenue producing elements.
Although this is an apparent positive trend, there is uncertainty as to the
longevity of this trend. Maintaining this trend is necessary for the Company's
short-term as well as long-term internal liquidity. Management feels that the
receivables are collectable, it is anticipated that the receivables will
"roll-over" monthly or bi-monthly. Some leniency has been afforded new
advertising accounts to boost the initial advertising sales. By the same token,
management feels that the increase in accounts payable are too the direct result
of additional business and that the payables will continue to "roll-over"
monthly or bi-monthly.
We have incurred recurring operating losses and negative cash flows from
operating activities and have little working capital. Presently, there is no
outstanding material commitment for capital expenditures. We believe that our
available equity financing arrangement with Swartz will be sufficient to meet
our working capital and capital expenditure liquidity requirements for at least
the next two years. However, there can be no assurance that we will receive
financing from Swartz, that we will not require additional financing within this
time frame or that such additional financing, if needed, will be available on
terms acceptable to us, if at all. See section entitled "Swartz Investment
Agreement", above, for further detail on this equity transaction.
RESULTS OF OPERATIONS
Income
The comparative revenue for the first six months of 2001 compared to the same
period for 2000 shows an increase of $217,697. This increase is due primarily to
receipt of additional revenues from the mobile LED truck unit that has been
booked throughout these first six months nearly every weekend. Also, as the
Company installs additional EyeCatcher display boards, additional advertisements
are sold. Generally, this is cumulative, i. e., as the display boards are
placed, the advertisements are sold for a term of several months or a yearly.
Even though the advertisement contracts expire, many are renewed with a minimal
amount of sales effort and the display board continues to produce revenue with
no
additional effort necessary to place the display board because it remains in
place at the host venue so long as it continues to produce revenue for the host
venue.
General and Administrative Costs and Expenses
There was an increase in the General and Administrative Costs and Expenses of
$52,379 for the second quarter comparison of 2000 and 2001 and an increase of
$204,140 for the first six months of these two years. This increase is due
primarily to the Company being operational.
Interest Expense
Interest Expense decreased by $5,257 for the first six months of 2001 compared
to the same period of 2000. This interest expense decreased primarily as a
result of the Company negotiating equity financing for debt transactions.
Depreciation and Amortization
Depreciation and amortization increased by $58,166 primarily as a result of
advertising boards being available for lease. Previously, these boards were to
be sold and not leased and included in inventory.
Total Costs and Expenses
The Total Costs and Expenses have increased by $80,986, an increase of 29.2% in
the second quarter of 2001 when compared to the second quarter of 2000 and for
the first six months of the two years compared, the increase was $257,049, a
63.8% increase. This is the effect of the Company depreciation and amortization
increasing $29,048 and $58,166 primarily as a result of the boards and general
and administrative expenses increasing $52,379 and $204,140 primarily because of
being operational in comparative quarters and the six months ended,
respectively.
Loss From Operations and Net Loss
The $39,352 increase in Loss from Operations for the first six months term of
2001 compared to 2000 is the effect of an increase in the total costs and
expenses and the income. The total costs and expenses increased as did the
income, only to a lesser extent (63.8%).
Basic and Fully Diluted Loss Per Common Share
The Basic Loss Per Common Share for the same comparative two quarters has
decreased from $(0.060) to $(0.043), a comparative Basic Loss Per Common Share
decrease of 28.3%. This loss per common share is a function of the Costs and
Expenses versus Income. As stated above, a major portion of the Costs and
Expenses are non-reoccurring start-up costs. Compared to a year ago, we are now
fully staffed and beginning to produce income. We are continuing to concentrate
on establishing new business and increasing sales relating to the IllumiSign
Eyecatcher, the "EyeCatcher Powered by Insight" backlit display board and the
LED display sign truck.
TRENDS AND EVENTS
Over the past approximately three months we have been engaged in a slight change
in our operations model primarily in that we have regained the marketing role
in-house. Management feels that this is a positive change in that the Company
now has total control of all marketing activities. The Company continues to
allocate geographical areas to distributors who, in turn, focus on their
respective areas.
The Company out grew it its leased office and warehouse space and has moved to
new quarters that has sufficient space for growth. The new expanded warehouse
area now has sufficient space to handily store the various type and size display
boards as well as work area for refurbishing and repairs. When the mobile LED
screen truck is not in use, it is placed in a specially built truck bay within
the new warehouse area. An order has been placed for an additional LED mobile
unit.
In the opinion of management, the cumulative effect of these events is a
positive trend. Although there is no real assurance that this positive trend
will continue; this trend is further reinforced by the 21% decrease in the Basic
and Fully Diluted Loss Per Common Share.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Registrant is a Small business issuer as defined by these Regulations and need
not provide the information required by this Item 3.
PART II - OTHER INFORMATION
LEGAL PROCEEDINGS.
The Company is a defendant in a lawsuit filed on November 5, 1999 in the Circuit
Court of the Eleventh Judicial Circuit in and for Miami-Dade County, Florida,
Case Number 99-26073 CA 10. The plaintiff, Joseph Maenza, is seeking to collect
payment of a promissory note in the principal amount of $50,000 plus interest
from February 1999 and attorney fees. January 24, 2001 the parties agreed to a
settlement by making periodic payments. There is presently owed on this
settlement account a principal balance of $42,700. This settlement is recognized
as a liability of the Company.
CHANGES IN SECURITIES AND USE OF PROCEEDS.
COMMON STOCK, REVERSE STOCK SPLIT
May 7, 2001 the shareholders voted to amend the Articles of Incorporation to
decrease the number of authorized shares of common stock from 75,000,000 to
15,000,000, the 5:1 split (the Reverse Split). This amendment to the Articles of
Incorporation became effective May 18, 2001 and the Company trading symbol was
changed from NMMI to NMMG. See the Definitive Proxy Statement filed April 18,
2001 for additional information. The Company has no plans for the cancellation
or purchase of shares of Common Stock from holders of a nominal number of shares
following the Reverse Split and has no present intention to take the Company
private through Reverse Split or otherwise. Preferred shares, none of which are
issued at the present time, are not affected by this split.
REGISTRATION STATEMENT ON FORM S-8
June 4, 2001 the Company filled a Registration Statement on Form S-8 under the
Securities Act with respect to Common Stock. For further information with
respect to the Company and its Common Stock, reference is made to the
Registration Statement and the exhibits and schedules thereto.
SALE OF SECURITIES NOT REGISTERED
June 5, 2001 100,000 shares of non-registered common stock were conveyed to Ray
Oliver in consideration for corporate and financial strategic consulting
services and analysis.
June 5, 2001 20,000 shares of non-registered common stock were conveyed to
Natalie Stavrakis in consideration for services rendered as corporate secretary
over the past two years.
July 6, 2001 100,000 shares of non-registered common stock were conveyed to
Russell Wahl in consideration for a financial obligation owed to him and for
further consideration for current consulting services being rendered in the
nature of corporate operational and bookkeeping practices.
DEFAULTS UPON SENIOR SECURITIES.
None.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
See above, Item 2, Common Stock, Reverse Split. May 7, 2001 the shareholders
voted to amend the Articles of Incorporation to decrease the number of
authorized shares of common stock from 75,000,000 to 15,000,000, the 5:1 split
(the Reverse Split). On the date of the May 7, 2001 Shareholders Meeting there
were 28,902,462 shares qualified to vote. 18,935,611 votes were cast in favor of
the Reverse Split and 318,914 votes were cast against the proposed Reverse
Split; there were no abstentions. The resolution passed by 65.5% of the issued
and outstanding shares voting in favor of the Reverse Split.
OTHER INFORMATION.
On July 30, 2001 the Company filed a Post Effective Amendment to Form SB-2
Registration Statement for Small Business Issuers that was filed September 13,
2000.
EXHIBITS AND REPORTS ON FORM 8-K (SECT. 249.308 OF THIS CHAPTER).
Financial Statements are incorporated in the body of this report.
No reports on Form 8-K have been filed during the quarter for which this report
is filed.
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.
Signed and submitted this 24 day of October 2001.
New Millennium Media International, Inc.
(Registrant)
by: /s/
------------------------------------
John Thatch as President/CEO