SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB/A
[X] Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934 For the quarterly period ended June 30, 2002
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
6670 Spring Lake Road, Keystone Heights, Florida 32656
(Address of principal executive offices of registrant)
(352) 473-6673
(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 August 1, 2002 was 5,848,612.
AMERICAN ACCESS TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Unaudited
June 30, 2002 December 31, 2001
------------- -----------------
ASSETS
Current Assets:
Cash and cash equivalents $ 266,955 $ 348,757
Investment securities 856,420 1,751,665
Accounts receivable, net of allowance of $75,000 1,170,871 1,084,012
Inventories 674,884 707,553
Prepaid expenses and other current assets 45,855 83,093
Notes receivable, directors and stockholders,
including accrued interest 185,961 178,211
Note receivable, other, net of allowance of $361,562 -- --
------------ ------------
Total current assets 3,200,946 4,153,291
Property, Plant and Equipment 3,159,704 2,883,368
Patent Costs 73,833 70,404
Intangible Assets 579,025 --
Other Assets 4,820 13,075
Investment in iBid America, Inc. 40,931 --
Deposit on Product Rights -- 129,780
------------ ------------
Total assets $ 7,059,259 $ 7,249,918
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 239,627 $ 370,373
Accrued expenses 66,162 89,169
------------ ------------
Total current liabilities 305,789 459,542
------------ ------------
Long-Term Liabilities:
Common stock payable 500,000 --
------------ ------------
Commitments, Contingencies, Other Matters and Subsequent Events -- --
Stockholders' Equity:
Common stock, $.001 par value; authorized 30,000,000 shares;
issued 5,848,612 shares 5,849 5,847
Additional paid-in capital 13,670,072 13,606,551
Deficit (7,419,292) (6,820,252)
------------ ------------
6,256,629 6,792,146
Treasury stock, 5,000 and 2,000 common shares at cost, respectively (2,889) (1,500)
Stock subscription receivable, net of allowance of approximately $2,712,000 (270) (270)
------------ ------------
Total stockholders' equity 6,253,470 6,790,376
------------ ------------
Total liabilities and stockholders' equity $ 7,059,259 $ 7,249,918
============ ============
See notes to condensed consolidated financial statements.
1
AMERICAN ACCESS TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
Six Months Ended Six Months Ended Three Months Ended Three Months Ended
June 30, 2002 June 30, 2001 June 30, 2002 June 30, 2001
------------- ------------- ------------- -------------
Net Sales
Formed metal $ 1,547,519 $ 1,447,045 $ 710,355 $ 700,688
Zone cabling termination cabinet 804,867 727,079 294,516 325,197
----------- ----------- ----------- -----------
2,352,386 2,174,124 1,004,871 1,025,885
----------- ----------- ----------- -----------
Costs and Expenses:
Cost of sales 1,206,876 1,100,247 528,202 550,681
Selling, general and administrative 1,708,501 1,539,171 851,242 729,521
Stock-based compensation 77,235 210,021 37,789 174,842
----------- ----------- ----------- -----------
2,992,612 2,849,439 1,417,233 1,455,044
----------- ----------- ----------- -----------
Loss Before Other Income (Expense) (640,226) (675,315) (412,362) (429,159)
----------- ----------- ----------- -----------
Other Income (Expense):
Interest income 22,773 19,727 9,574 8,886
Interest expense -- (17,233) -- (8,440)
Other income 19,367 10,868 5,540 7,644
Realized and unrealized gain (loss) on investments (1,454) -- (1,454) --
Provision for doubtful loan receivable,
related party -- (221,278) -- (221,278)
----------- ----------- ----------- -----------
40,686 (207,916) 13,660 (213,188)
----------- ----------- ----------- -----------
Net Loss $ (599,540) $ (883,231) $ (398,702) $ (642,347)
=========== =========== =========== ===========
Basic Net Loss Per Common Share $ (.10) $ (.19) $ (.07) $ (.14)
=========== =========== =========== ===========
See notes to condensed consolidated financial statements.
2
AMERICAN ACCESS TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
Six Months Ended Six Months Ended
June 30, 2002 June 30, 2001
--------------- ----------------
Cash Flows from Operating Activities:
Net loss $(599,540) $(883,231)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 285,952 171,952
Warrants and stock issued for services 77,235 210,021
Loss on abandonment of leasehold equipment 14,433
Provision for doubtful loan receivable, related party -- 221,278
Changes in operating assets and liabilities:
(Increase) decrease in:
Accounts receivable (86,858) (75,319)
Accrued interest receivable -- (17,750)
Inventories 32,669 108,287
Prepaid expenses and other current assets 37,238 30,361
Increase (decrease) in accounts payable and accrued expenses (147,937) 69,779
--------- ---------
Net cash used in operating activities (386,808) (164,622)
--------- ---------
Cash Flows from Investing Activities:
Proceeds from sale of investments 896,269 --
Increase in notes receivable and accrued interest (7,750) --
Acquisition of property and equipment (510,714) (7,379)
Acquisition of product line (50,000) --
Decrease in patent costs and other assets 2,302 --
--------- ---------
Net cash provided by (used in) investing activities 330,107 (7,379)
--------- ---------
Cash Flows from Financing Activities:
Proceeds from issuance of common stock, net of related costs -- 9,284
Payments on loans and capital lease obligations -- (19,475)
Acquisition of treasury stock (25,101) --
--------- ---------
Net cash provided by financing activities (25,101) (10,191)
--------- ---------
Net Increase (Decrease) in Cash and Cash Equivalents (81,802) (182,192)
Cash and Cash Equivalents, Beginning 348,757 399,948
--------- ---------
Cash and Cash Equivalents, Ending $ 266,955 $ 217,756
========= =========
Non-Cash Investing and Financing Activities:
Common stock obligation issued as partial consideration for product line acquisition $ 500,000 $ --
--------- ---------
Accounts receivable exchanges as partial consideration for product line acquisition $ 133,439 $ --
--------- ---------
Exchange of stock of subsidiary for iBid America, Inc. common stock $ 40,931 $ --
--------- ---------
Supplemental Disclosure for Cash Flow Information:
Cash paid for interest $ -- $ 17,233
--------- ---------
See notes to condensed consolidated financial statements.
3
AMERICAN ACCESS TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2002 Unaudited
1. Basis of Presentation
The accompanying unaudited consolidated condensed financial statements at June
30, 2002 have been prepared in accordance with accounting principles generally
accepted in the United States 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
June 30, 2002 and results of operations for six months ended June 30, 2002 and
2001. 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, 2001 included in the Company's Form 10-KSB.
2. Nature of Business and Summary of Significant Accounting Policies.
BUSINESS
American Access Technologies, Inc. manufactures patented zone cabling enclosures
for the telecommunications industry, enabling businesses and government to Move,
Add, and Change copper and fiber optic cabling to keep pace with advances in
high-speed communications networks. Our ceiling and raised floor cabinets, our
systems furniture panels, and our wireless solution can save up to 70% of the
cost to reconfigure office and school data centers and networks by eliminating
excessive wiring and rewiring in traditional home run arrangements.
Our wholly-owned subsidiary, Omega Metals, Inc., continues to manufacture zone
cabling cabinets along with other metal fabricating jobs, ensuring quality and
cost control. The ability to powder coat metals is available at our plant. We
also have the ability to punch and stamp metal.
We have entered into private labeling agreements with several top manufacturers
in the communications industry, for which we design products to their
specifications, serving as an Original Equipment Manufacturer, or label our
standard and modified products to suit these customers' needs. Our wireless
solution, added to our product line in 2001, has generated great interest in the
commercial marketplace, including as the subject of some of our private label
agreements.
American Access is approved as a vendor for government services contracts. As an
approved vendor, we are able to sell our products for network applications at
the federal level. Through one of our private label partners, we sub-contracted
to manufacture a key component in a secured telecommunications unit ordered for
rush delivery by the Pentagon to be installed during renovations after the
September 11 tragedy. We also manufacture as sub-contractor the housing for a
chemical warfare detector used by the U.S. Army.
4
The Company is a member of the Telecommunications Industry Association, and we
have committed to working on its subcommittees that study zone cabling
solutions. The TIA sets telecommunications industry standards.
Our three independent sales contractors market our zone cabling products and
other metal fabricating jobs when the opportunity arises. The three sales agents
have extensive backgrounds selling in the telecommunications industry.
We purchased the product rights to the Eclipse Air Cleansing System from Bill
Sherer Corporation and Bill Sherer in January 2002 in exchange for a one-time
cash payment of $50,000, accounts receivable due from the seller in the amount
of approximately $133,000 and restricted common stock valued at $500,000 at the
time of issuance over the next five years. No stock can be drawn down until one
year from the anniversary date of the purchase and at no time will the Seller
own more than 19.9 percent of the Company's stock. Mr. Sherer has been retained
as a marketing consultant under a separate agreement.
On June 14, 2002, and amended on June 28, 2002, our wholly-owned subsidiary
Zonecabling.com, Inc. entered into an Agreement and Plan of Merger with iBid
America, Inc., of Pompano Beach, Florida, in which Zonecabling will be merged
into iBid America. In exchange for all the outstanding shares of
Zonecabling.com, Inc., we received 750,000 shares in the surviving company, to
be named iBid International, Inc. We expect 300,000 iBid shares will be
distributed to our shareholders pending an effective Registration Statement.
American Access will retain 450,000 shares of iBid stock. Based on the shares
outstanding as of June 14, American Access shareholders will receive about 51
shares of iBid Common Stock for every 1,000 shares of our Common Stock owned,
and such shares shall represent approximately 2.5% of iBid's outstanding common
stock, while the 450,000 iBid shares we retain will represent approximately 3.7%
of iBid's outstanding common stock. Completion of the Merger and the share
distribution is subject to certain conditions including the filing and
effectiveness of a Registration Statement. Zonecabling.com, Inc. was
incorporated as a subsidiary on May 4, 2000 to market our products through a
Business-to-Business e-commerce portal. We subsequently determined that
marketing our products in this manner competed with our traditional marketing
methods and we negotiated a Management with Option to Purchase Agreement with a
former shareholder and officer/director, signed March 27, 2001. That agreement
was terminated precedent to signing the Agreement and Plan of Merger between
Zonecabling.com, Inc., and iBid America, Inc. The former shareholder and
officer/director is the current Chief Financial Officer of iBid America, Inc.
Our Advisory Board members are assisting us in evaluating joint ventures,
pending and future private label agreements, and possible future acquisitions
and mergers. Members may also review public relations and marketing materials,
make presentations, introduce the Company's zone cabling products to help
establish a niche in the marketplace, suggest improvements to business
procedures, and advise the Company on products, industry customs and trends.
5
NET LOSS PER COMMON SHARE
The Company follows Statement 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. Diluted
loss per share has not been presented, as it would be anti-dilutive. The
computation of net loss per share is reflected in the following schedule:
Computation of Net Loss Per Six Months Ended Six Months Ended Three Months Ended Three Months Ended
Common Share June 30, 2002 June 30, 2001 June 30, 2002 June 30, 2001
------------- ------------- ------------- -------------
Net Income (Loss) $ (599,540) $ (883,231) $ (398,702) $ (642,347)
============= =========== ============== ===========
Total Weighted Average Number
of Common Shares and Equivalents 5,857,383 4,683,130 5,867,898 4,476,180
============= =========== ============== ===========
Net Loss per Common Share $ (0.10) $ (0.19) $ (0.07) $ (0.14)
============= =========== ============== ===========
NOTES RECEIVABLE RELATED PARTY
In May and June 2000, the Company authorized loans to two directors, who also
are officer-employees of American Access or its subsidiaries, and who secured
the loans with personal assets unrelated to these transactions. The secured
loans were to enable these directors to cover margin calls precipitated by a
drop in the price of the Company's common stock. On May 31, 2000 Director and
Company President John Presley and Director Erik Wiisanen each executed a
promissory note and security agreement for $75,000 and $60,000 respectively,
payable to the Company on or before December 31, 2000, with interest at the rate
of 10 percent paid in arrears. In October 2000, Mr. Presley and Mr. Wiisanen
executed additional promissory notes with identical terms for $10,000 each,
payable to the Company on or before April 30, 2001. The notes have been extended
to June 30, 2003. These transactions were approved by disinterested directors in
accordance with the Florida Business Corporation Act.
6
STOCK-BASED COMPENSATION
Common Stock
On August 1, 2001 the Company entered into an agreement for investment banking
services with Kirlin Securities. We agreed to pay Kirlin $5,000 of common stock
a month, the amount of shares due to be recalculated quarterly, for one year,
payable at the beginning of each three-month period. The Company registered
60,000 shares of common stock on an SB-2 that became effective October 10, 2001,
in anticipation of payments to be made for the life of the contract. Kirlin was
issued 46,543 shares for the period beginning August 1, 2001 and ending April
30, 2002. The agreement with Kirlin was terminated in writing as of April 30,
2002, pursuant to agreed upon terms, with 30 days notice.
Warrants
On April 1, 2002, the Company issued 20,000 5-year warrants in connection with
services provided to the Company by an Advisory Board member. The exercise price
is $1.75.
On May 2, 2002, the Company issued 650,000 5-year options in connection with
three employment agreements negotiated with senior management. The exercise
price is $1.00. President and CEO John Presley and Vice President Erik Wiisanen
received 300,000 options each. CFO Joseph McGuire received 50,000.
On June 14, 2002, the Board voted to extend 54,600 stock options granted to
retiring Director William Hadaway for a period of one year from the date of
resignation.
The granting of stock, stock options or warrants to consultants resulted in a
charge to stock based compensation in the amount of approximately $40,000 in the
second quarter 2002 representing the fair value of the 220,000 warrants issued
in 2001, which were and are being amortized and expensed in 2001 and 2002,
125,000 warrants issued in the first quarter of 2002 and 74,600 warrants/options
issued in the second quarter of 2002, which are being amortized and expensed in
2002.
Fair Value Disclosures
For the six months ended June 30, 2002, had compensation cost for the 650,000
stock options issued to officers/directors in the second quarter 2002, the
765,370 stock options issued to officers/directors in the second quarter 2001
and an additional 213,333 warrants issued in the first quarter 2001 for services
rendered to zonecabling.com, been determined based on the fair value at the
grant date consistent with SFAS No. 123, the Company's net loss and loss per
share would have been as follows:
7
Six Months Ended Six Months Ended Three Months Ended Three Months Ended
June 30, 2002 June 30, 2001 June 30, 2002 June 30, 2001
-------------- ------------- ------------- -------------
Net Loss:
As reported $ (599,540) $ (883,231) $ (398,702) $ (642,347)
============== ============== ============== ===========
Pro forma $ (721,801) $ (996,773) $ (430,609) $ (732,701)
============== ============== ============== ===========
Loss Per Share:
Basic:
As reported $ (0.10) $ (0.19) $ (0.07) $ (0.14)
============== ============== ============== ===========
Pro forma $ (0.12) $ (0.22) $ (0.07) $ (0.16)
============== ============== ============== ===========
The Company used the Black-Scholes option pricing model to determine the fair
value of grants made in the six and three months ended June 30, 2002 and 2001,
respectively. The following assumptions were applied in determining the pro
forma compensation cost:
Six Months Ended Six Months Ended Three Months Ended Three Months Ended
June 30, 2002 June 30, 2001 June 30, 2002 June 30, 2001
-------------- ------------- ------------- -------------
RiskFree
Interest Rate 4.99%-5.5% 5.5% 4.99%-5.5% 5.5%
Expected
Dividend Yield -- -- -- --
Expected
Option Life 1.25-2.5 years 1-2.5 years 1.25-2.5 years 2.5 years
Expected Stock
Price Volatility 122-131% 122-133% 122-131% 133%
3. Contingencies and Commitment
LEGAL PROCEEDINGS
On August 2, 2002, American Access Technologies, Inc. and Vulcan Microsystems,
Inc. amicably settled the lawsuits the parties had filed against each other
pursuant to their business relationship. Neither party received monetary
damages. Additionally, American Access has been removed as guarantor on an
equipment loan secured by Vulcan. On September 14, 2000, American Access was
served as a defendant in a lawsuit filed by Vulcan in the Circuit Court of the
Eleventh Judicial Circuit for Miami-Dade County Florida. Vulcan alleged that
American Access breached the terms and committed other misdeeds in connection
with the companies' letter of intent to establish a joint venture to engage in
e-commerce. Our subsidiary for that purpose, AATK.com, LLC, on September 28,
2001 was administratively dissolved by the Florida Department of State. The
subsidiary was created on February 2, 2000 with Vulcan and Grovegate Capital,
LLC. We owned 76%, Vulcan owned 19% and Grovegate owned 5% of the joint venture.
Vulcan sought in excess of $15,000 damages. American Access filed a counterclaim
against Vulcan and its principals Eric Gray and Bill Wetmore to include damages
in excess of $15,000. We alleged that Vulcan, Gray and Wetmore breached the
terms of the letter agreement and committed other misdeeds in connection with
the joint venture. A Settlement and Release Agreement was reached in July 2002.
8
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
THREE AND SIX MONTHS ENDED JUNE 30, 2002
COMPARED WITH THE THREE AND SIX MONTHS ENDED JUNE 30, 2001
REVENUES
Revenues for the three months ended June 30, 2002 decreased by $21,014 or 2.0%
to $1,004,871 to as compared to $1,025,885 for the three months ended June 30,
2001. Revenues for the six months ended June 30, 2002 increased by $178,262 or
8.2 % to $2,352,386 as compared to $2,174,124 for the six months ended June 30,
2001.
COSTS AND EXPENSES
Direct costs represent costs incurred by the Company to have its products
manufactured and assembled. These costs represent 52.6 % of revenues for the
three months ended June 30, 2002 and 53.7 % of revenues for the three months
ended June 30, 2001. Direct costs represent 51.3 % of revenues for the six
months ended June 30, 2002 and 50.6 % of revenues for the six months ended June
30, 2001. In the second quarter the composition of jobs was more favorable, with
a slightly higher profit margin than in the first quarter 2002. Selling,
General and Administrative expenses increased by $121,721 to $851,242 for the
three months ended June 30, 2002 as compared to $729,521 for the three months
ended June 30, 2001.
Selling, General and Administrative expenses increased by $169,330 to $1,708,501
for six months ended June 30, 2002 as compared to $1,539,171 for the six months
ended June 30, 2001. The increases from the low 2001 levels are primarily
results of amortization of the UV light purchase (approximately $104,000) and a
one time charge for the buy out of our Lake Mary lease (approximately $34,000).
INCOME (LOSS) FROM OPERATIONS
Loss from operations for the quarter ended June 30, 2002 was $412,362 as
compared to a loss of $429,159 for the quarter ended June 30, 2001, a decrease
of $16,797. Loss from operations for the six months ended June 30, 2002 was
$640,226 as compared to a loss of $675,315 for the six months ended June
30,2001, a decrease of $35,089.
NET INCOME (LOSS)
Net loss for the quarter ended June 30, 2002 was $398,702 compared to $642,347
for the quarter ended June 30, 2001. Net loss for the six months ended June 30,
2002 was $599,540 compared to $883,231 for the six months ended June 30, 2001.
9
LIQUIDITY AND CAPITAL RESOURCES
The Company's operating activities utilized cash of $386,808 during the six
months ended June 30, 2002 as compared to utilizing cash of $164,622 during the
six months ended June 30, 2001. We purchased approximately $500,000 in
additional equipment to expand and enhance our metal fabrication capabilities in
2002.
MANAGEMENT'S PLANS INCLUDE THE FOLLOWING:
The bear market and languishing economy have affected many businesses in 2002,
including American Access, which has experienced soft sales for our proprietary
products, since many retrofit and new construction projects have been postponed.
We continue to quote metal fabrication jobs, but these jobs are smaller and less
profitable, and some of our customers ceased operations in the past year.
Despite the difficult economic environment, the Company continues to move toward
profitability by reducing costs and increasing sales in four key areas: our zone
cabling products, our powder coating operations, metal fabrication and our
recently acquired Ultraviolet Light Air Cleansing System. Our private label
agreements continue to provide an avenue for increased sales for both zone
enclosures and metal fabrication. We purchased additional equipment to expand
and enhance our metal fabrication capabilities. We closed our Lake Mary offices
in June 2002, at a cost savings of approximately $15,000 per month. We also
continue to seek merger and acquisition candidates as a viable means of growth,
including our acquisition of the Ultraviolet Light Air Cleansing System in
January 2002, and the recent merger and pending spin-off of our subsidiary,
Zonecabling.com, Inc., with iBid America, Inc.
Our marketing plan targets profitability by year-end 2002. To accomplish
profitability, we are intensifying our sales and cost management efforts in
these key areas:
o Signed Zone Cabling Private Label Agreements with Systems Providers
(Original Equipment Manufacturers or OEMs) that buy and sell product
and specify telecommunications systems to end-users. We have signed
private label agreements with companies such as Tyco, Hitachi,
Flexspace and continue to negotiate others with leaders in the
telecommunications industry.
o Increase Sales for Metal Fabricating: Our sales agents, who
professionally place our zone cabling cabinets, are also approaching
systems providers for other metal fabricating jobs they may require
and that our subsidiary, Omega Metals, can provide. These orders are
beginning to flow. Additionally, we have replaced some of our sheet
metal customers that ceased operations with two, large northern
accounts. We are quoting more, but smaller jobs, building our customer
base without detrimental reliance on any one large customer.
10
o Enlist Distributors for the Eclipse Ultraviolet Light Air Cleansing
System: We acquired the product rights to the Eclipse in January 2002,
and sales continue to grow for this line. We believe sales should be
driven through distributors that target HVAC contractors. We have
negotiated two agreements with leading distributors in this field.
Additionally, with growing concern about toxic mold in the workplace,
we are manufacturing a commercial unit.
o Renew Interest in Powder Coating: Our powder coating facility has been
underutilized until recently. We offer our private label customers the
opportunity to have our proprietary cabinets finished by this process.
We also have secured a long-term contract for the process, as well as
numerous jobs from nationwide and international customers. Commitments
for powder coating in the last two quarters of 2002 exceed the past
trend in these jobs.
o Pare Costs by Constant Evaluation of Expenses: We closed our Lake Mary
offices at a cost savings of approximately $45,000 per quarter. We
continue to monitor head count to make sure our work force remains
optimum for productivity. We employ a proactive instead of a reactive
attitude toward economic changes that affect our business.
Between October 10 and 12, 2001 the Company acquired substantial working capital
through the exercise of outstanding warrants by investment bankers, employees
and consultants. Additionally, two promissory notes totaling $200,000, plus
interest of $26,866 have been paid back to the Company on October 18, 2001. We
believe that the capital generated by the exercise of warrants and the repayment
of the loan will be sufficient for us to meet our needs through 2002. Any
additional capital needs can be met through private placement, or borrowings,
including bank borrowing and private equity lines, in view of the nature of our
customer base. Since our 67,500 sq. ft. plant is unencumbered, we also have the
potential to mortgage it to raise capital.
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, technological obsolescence and the difficulties faced by
young companies in general. In addition, at February 14, 2002, the price of the
Company's common stock had closed below the Nasdaq minimum required $1.00 per
share for the past 30 consecutive days. At August 13, pursuant to continued
Nasdaq listing standards that required us to have regained compliance and traded
above $1.00 for ten (10) consecutive days, which we were not able to do, we will
be eligible for an additional 180-day grace period by demonstrating $5,000,000
in shareholders' equity, $750,000 in net income from continuing operations, or
$50,000,000 in market value of listed securities.
11
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
The Company purchased in an authorized buyback, 2,000 shares of its common stock
in December 2001, and 27,800 shares in January 2002, all of which (29,800
shares) was remanded to Treasury and retired on June 13, 2002. In June 2002, we
purchased 5,000 shares of our common stock pursuant to our authorized buyback.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) Exhibits:
99.1 Written Statement of the Chief Executive Officer
99.2 Written Statement of the Chief Financial Officer
(b) Reports on Form 8-k: None
12
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 5, 2002
AMERICAN ACCESS TECHNOLOGIES, INC.
(Registrant)
By: /s/ Joseph F. McGuire
----------------------------------------
Joseph F. McGuire
Treasurer
Chief Financial Officer
By: /s/ John E. Presley
----------------------------------------
John E. Presley
President
13