Form 10-QSB/A for AMERICAN ACCESS TECHNOLOGIES, INC. SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-QSB/A [XX] Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 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 37 Skyline Drive, Suite 1101, Lake Mary, Florida 32746 (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 March 31, 1999 was 3,265,470 AMERICAN ACCESS TECHNOLOGIES, INC. NOTES TO FINANCIAL STATEMENTS MARCH 31, 1999 Unaudited 1. Basis of Presentation The accompanying unaudited consolidated condensed financial statements at March 31, 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 March 31, 1999 and results of operations for the three months ended March 31, 1999 and 1998 and cumulative. 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 (the "Product") 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. ("Omega"), a wholly-owned subsidiary of the Company, shears and molds metal and manufactures metal-formed product for customers principally in Florida and Georgia. Omega manufactures the Company's Product. TERMINATION OF DEVELOPMENT STAGE The Company was incorporated on October 21, 1996. Through November, 1998, the Company had been principally engaged in organizational activities, the promotion of its product and raising capital. Planned operations, as described above, had commenced but revenue generated was not considered significant in relation to the Company's business plan. Accordingly, the Company was considered to be in the development stage, through the date of acquisition of Omega Metals, Inc. on November 11, 1998. Omega is a mature company, which has been in the operating stage for a number of years with an established history of revenue and profits, significantly larger than those of AAT. Accordingly, effective upon the acquisition of Omega, the Company is no longer considered to be a development stage enterprise, and the accompanying financial statements are presented as those of an established operating enterprise. 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 shares of common stock issued in connection with the stock split effected in February 1997, have been considered outstanding for all periods. In addition, the shares of common stock issued to a Director in February 1997, prior to an initial registration of the Company's common stock and at a price at that time have been treated as outstanding during the entire period, pursuant to the Securities and Exchange Commission Staff Accounting Bulletins. The computation of earnings per share is reflected in the following schedule: Computation of Net Loss Per Common Share Three Months ended Mar. 31, 1999 Year Ended Dec. 31, 1998 Net Income (Loss) $ 218,911 $ (492,814) Cumulative Preferred Stock Dividend (125,000) (104,167) Beneficial Conversion Preferred Stock Dividend (468,750) (781,250) $ (374,839) $ (1,378,231) Weighted Average Common Shares Outstanding 3,030,270 2,992,500 Common Shares Issued to Acquire Omega Metals, Inc. 226,470 226,470 Total Weighted Average Number of Common Shares and Equivalents 3,265,470 3,218,970 Net Loss per Common Share $ (.11) $ (.43) 3. Contingencies LITIGATION SETTLED The Company was a defendant in a suit filed in January 1998 in the 18th Judicial Circuit Court of Florida by Steve R. Jones, the Company's president from April to August 1997. Jones sought damages and a declaratory judgment as to the enforceability of a consulting agreement with the Company. On March 17, 1999, this suit was settled in mediation. American Access will receive no consultant agreement services from Mr. Jones, and Mr. Jones will receive no compensation for such services. Mr. Jones will receive certain stock options from registrant and will continue to be subject to the non-competition and confidentiality provisions of his consultant agreement. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION THREE MONTHS ENDED MARCH 31, 1999 COMPARED WITH THE THREE MONTHS ENDED MARCH 31, 1998 REVENUES Revenues for the three months ended March 31, 1999 increased by $467,349 or 56.8% to $1,290,062 as compared to $822,713 for the three months ended March 31, 1998. The parent company, American Access Technologies, Inc., was still in the development stage for the first quarter ended March 31, 1998, and revenues were only $129,799. In the first quarter for the year ended March 31, 1999, revenues increased by $205,954 to $335,753. The company's subsidiary, Omega Metal Inc., also had an increase in revenues of $261,395. COSTS AND EXPENSES Direct costs represent the cost incurred by the Company to have its products manufactured and assembled. These costs represented 38.9% of revenues for the three months ended March 31, 1999, and 47.4% of revenues for the three months ended March 31, 1998. The decrease in the direct costs is mainly attributed to Omega Metals Inc. Due to a change in the customer mix, revenues generated for March 31, 1999 required less direct labor and material costs than for the previous year's quarter ended March 31, 1998. Selling, General and Administrative expenses increased by $138,025 to $676,576 for the three months ended March 31, 1999 compared to $538,551 for the three months ended March 31, 1998. This increase was the result of costs associated with the continued development growth of the company including marketing and promotion, management costs, and professional fees associated with the required filings. LIQUIDITY AND CAPITAL RESOURCES The Company's operating activities utilized cash of $48,212 during the three months ended March 31, 1999 as compared to providing cash of $120,100 during the three months ended March 31, 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 revenues in addition to existing cash and cash equivalents remaining from proceeds of it private offering, will be sufficient to meet its capital and liquidity needs for the next 12 months. The Company also believes that cash required to fulfill purchase orders will be available through bank borrowings or factoring, if required. The company's primary customers are substantial 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 is presently organizing a manufacturer's rep program to assist in the distribution of their equipment. 2. The Company has arranged for manufacture of its products by purchasing the manufacturer in October, 1998, in order to minimize the financial requirements necessary for production. 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, technological obsolescence and the difficulties faced by start up companies in general. SUBSEQUENT EVENTS As of April 6, 1999, the Registration Statement became effective with regard to the Series A 10% Senior Convertible Preferred Stock, of which there were 50,000 shares issued and outstanding at $5,000,000. Through April 24, 1999, $3,776,100 has been converted resulting in 272,677 common stock shares being issued. A total of 216,383 shares were sold on the open market. PART II. OTHER INFORMATION 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 April 24, 1999, 75.5% of the Preferred Stock, $3,776,100 has been converted resulting in 272,677 common stock shares being issued. A total of 216,383 shares were sold on the open market. American Access Technologies began trading on the Nasdaq Stock Market, Inc., as a Small Cap listing, on April 13, 1999. ITEM 6. EXHIBITS AND REPORTS (b) EXHIBITS The following exhibits are being filed as part of this report: Exhibit No. Description 27.0 Financial Data Schedule ( c ) Exhibits on Form 8-K Incorporated By Reference, as filed with the Securities and Exchange Commission on March 29 and March 30, 1999, respectively. 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/ Charles L. Frampton ---------------------------------------- Charles L. Frampton Secretary/Treasurer Chief Financial Officer By: /s/ John E. Presley ---------------------------------------- John E. Presley President _____ EX-27 FDS --
'5 '3-MOS DEC-31-1999 JAN-01-1999 MAR-31-1999 3,241,303 0 911,032 28,000 330,595 5,024,452 2,813,403 (1,567,152) 6,582,884 650,189 0 0 5,000,000 3,265 860,430 6,582,884 1,290,062 1,290,062 501,777 1,178,353 0 0 5,610 203,741 (15,170) 218,911 0 0 0 218,911 (0.11) (0.11) 1351070.09