As filed with the Securities and Exchange Commission on August 3, 2001
Registration No. _______________
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
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.)
101 Philippe Parkway, Suite 300
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.
101 Philippe Parkway Suite 300
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 7,016,861 shares of the Company's common stock
issued and outstanding.
NEW MILLENNIUM MEDIA INTERNATIONAL, INC.
INDEX
Page
----
Part I Financial Information................................................5
Item 1 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
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations.............9
Overview....................................................9
Plan of Operations..........................................9
Liquidity and Capital Resources.............................9
Results of Operations......................................10
Net Loss...................................................10
Item 3 Quantitative and Qualitative Disclosures
About Market Risk..........................................10
Part II Other Information...................................................10
Item 1 Legal Proceedings..........................................10
Item 2 Changes in Securities and Use of Proceeds..................10
Common Stock...............................................10
Item 3 Defaults Upon Senior Securities............................11
Item 4 Submission of Matters to a Vote of Security Holders........11
Item 5 Other Information..........................................11
Item 6 Exhibits and Reports on Form 8-K...........................11
Signatures....................................................................12
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
NEW MILLENNIUM MEDIA INTERNATIONAL, INC.
CONDENSED BALANCE SHEET
JUNE 30, DECEMBER 31,
2001 2000
(UNAUDITED) (AUDITED)
------------ ------------
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 $ 55,798 $ 81,556
Accrued expenses payable 380,350 73,562
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; 7,116,862 and
5,688,123 (restated - see note 3) shares issued
and outstanding, respectively, 2001 and 2000 7,117 5,688
Preferred stock, par value $.001; shares authorized,
10,000,000 no shares issued and outstanding -- --
Additional paid in capital 3,701,018 2,764,447
Accumulated Deficit (2,384,205) (2,019,927)
------------ ------------
1,323,930 750,208
Treasury Stock, 1,000,000 shares at cost (875,000) --
------------ ------------
Total Stockholders' Equity 448,930 750,208
------------ ------------
$ 1,639,074 $ 1,563,436
============ ============
3
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
------------ ------------ ------------ ------------
Income $ 74,991 $ 1,044 $ 218,741 $ 1,044
Costs and Expenses:
General and administrative $ 284,091 $ 199,512 $ 486,044 $ 301,389
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 334,766 221,580 583,019 345,455
------------ ------------ ------------ ------------
Loss from Operations (259,775) (220,536) (364,278) (344,411)
------------ ------------ ------------ ------------
Net Loss $ (259,775) $ (220,536) $ (364,278) $ (344,411)
============ ============ ============ ============
Basic and Fully Diluted Loss Per Common Share $ (0.039) $ (0.048) $ (0.057) $ (0.073)
============ ============ ============ ============
Weighted Average Number of Shares Outstanding 6,586,863 4,615,892 6,402,493 4,717,934
============ ============ ============ ============
4
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
------------ ------------ ------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (259,775) $ (220,536) $ (364,278) $ (344,411)
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
(Increase) decrease in accounts receivable (38,707) -- (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 238,512 42,772 281,030 12,374
------------ ------------ ------------ ------------
Net cash provided by (used in)
operating activities (26,730) (172,911) (129,831) (344,936)
------------ ------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of goodwill -- -- -- (500)
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) (5,583)
------------ ------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable - Related 34,952 -- 95,886 15,000
Proceeds from common stock transactions 888,000 19,000 938,000 463,000
Cost of Treasury Stock Acquired (875,000) -- (875,000) --
------------ ------------ ------------ ------------
Net cash provided by (used in)
financing activities 47,952 19,000 158,886 478,000
------------ ------------ ------------ ------------
Increase in cash and cash equivalents $ 15,160 $ (155,537) $ 18,288 $ 127,481
Cash and cash equivalents at beginning of period -- -- -- 2,063
------------ ------------ ------------ ------------
Cash and cash equivalents at end of period $ 15,160 $ (155,537) $ 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 -- -- -- --
5
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 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.
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ITEM 2. 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.
The discussion and financial statements contained herein are for the three
months ended June 30, 2001 and 2000, and for the six months ended June 30, 2001
and 2000. The following discussion regarding the financial statements of the
Company should be read in conjunction with the financial statements of the
Company included herewith.
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.
PLAN OF OPERATIONS
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 motion display boards and the mobile LED boards.
Through much of the first quarter the Company had 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. This effort came
to fruition May 10, 2001. As a result, the Company hired a general sales manager
to conduct all marketing in-house and 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
As in the past, our liquidity has been principally supplied by equity financing
and loans from related parties. Accounts Receivable have risen considerably;
however, management feels that most, if not all, of these receivable are
collectable. The attached Condensed Balance Sheet shows our Current Assets
increased from $28,987 to $164,090 for the comparative terms ending June 30,
2000 and December 31, 2000, respectively. Our Total Assets increased $75,638 for
the same comparative period, an increase of 13%. Our Shareholders' equity,
before the treasury stock, showed an
7
increase of $573,722, an increase of 76% for June 30, 2001 compared to December
31, 2000.
RESULTS OF OPERATIONS
Although the Total Costs and Expenses are still high, there is a lowering trend.
The first six months of 2000 compared to the first six months of 2001 showed an
increase of $237,564, in increase of 68%; however, for the comparative second
quarter terms in 2000 versus 2001 the amount decreased to $113,186, 51%. When
the first six months of 2001 are compared to the second quarter of 2001, this
comparison percentage drops to 42%. If the non-cash charges (Depreciation and
amortization) are not considered, this become even more apparent.
Although the Total Costs and Expenses has doubled when compared to the first
quarter of 2000, the comparative Net Loss for these two quarters has decreased
by 15.6% and the Basic Loss Per Common Share for the same two quarters has
decreased from $(0.005) to $(0.003), a decrease of 40%. Compared to a year ago,
we are now fully staffed and beginning to produce income, an increase of $73,947
for the 2001 second quarter compared to the same 2000 quarter. We are continuing
to concentrate on establishing new business and increasing sales relating to the
IllumiSign-Eyecatcher front-lit movable display board; our new product line, the
"EyeCatcher Powered by Insight" back-lit movable display board; plasma screens
and LED display boards, both stationary and truck mounted.
NET LOSS
Net Loss from Operating Activities has increased $19,867 for the first half of
2001 compared to the same half year of 2000, a 5.7% increase; however, for the
same comparative periods the "Net cash used in operating activities decreased
$215,105, a 62% decrease. This is due in large part to increase in sales and a
decrease in the accounts receivable. Although the Net Cash Provided by Financing
Activities has decreased for this first half year compared to the same term of
2000, we expect this figure to increase in the future as we access our equity
line with Swartz Private Equity, LLC. Management feels that this is a good time
to gradually increase financing activities in order to finance new display
machines for all of our product lines which are intended to generate additional
cash flow. Our focus continues to be on growth through increasing cash flow.
ITEM 3. 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
ITEM 1. LEGAL PROCEEDINGS.
The Company was 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. January 24, 2001 the parties agreed to a
settlement.
8
ITEM 2. 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 functions.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. 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.
ITEM 5. OTHER INFORMATION.
On July 30, 2001 the Company filed a Post Effective Amendment Registration
Statement for Small Business Issuers. This document is a Post Effective
Amendment to Form SB-2 filed September 13, 2000.
ITEM 6. 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.
9
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 3rd day of August 2001.
New Millennium Media International, Inc.
(Registrant)
by: /s/______________________________
John Thatch as President/CEO
10