ADVANCED OXYGEN TECHNOLOGIES, INC.
INDEX
PART 1: FINANCIAL INFORMATION 3
Item I: Financial Statements
3
Balance Sheet
3
Income Statement
4
Statement of Cash Flow
5
Statement of Changes
6
Item 2: Management's Discussion and Analysis
of Financial Condition and Results of Operations.
6
PART II 8
Item 1: Legal Proceedings
8
SIGNATURE 8
PART 1: FINANCIAL INFORMATION
Item I: Financial Statements for the three months ending September 30, 2001. (Un-audited)
Balance Sheet, September 30, 2001 | 3 Months |
Current Assets | |
Cash |
0.00
|
Receivables |
16,558.91
|
Inventory | |
Total Current Assets |
16,558.91
|
Property and equipment | |
Fixed Assets | 911,391.00
|
Accumulated Depreciation | (911,391.04) |
Total Property - Equipment |
(0.04)
|
Other Assets, Deposits |
4,092.50
|
=============================== | =========== |
Total Assets |
20,651.37
|
Liabilities and Capital | |
Current Liabilities | |
Accounts Payable |
268,896.89
|
Other Current Liabilities | 0 |
Total Current Liabilities |
268,896.89
|
Long Term Liabilities | |
Note Payable, Crossfield | 114,101.28 |
Total Long Term Liabilities |
114,101.28
|
================================ | =========== |
Total Liabilities | 382,998.17 |
Capital | |
Beginning Balance Equity |
16,700.00
|
Preferred Stock |
50.00
|
Common Stock |
329,735.85
|
Paid in Capital |
20,490,298.15
|
Retained Earnings |
(21,187,808.61)
|
Treasury Stock |
(7,284.00)
|
Net Income | (4,038.19) |
Total Capital |
(362,346.80)
|
================================ | =========== |
Total Liabilities and Capital |
20,651.37
|
Income Statement for the three month period ending September 30, 2001 |
3 Months
|
Revenues | |
Database Management | 2,304.65 |
Total Revenues |
2,304.65
|
Cost of Sales |
0.00
|
Gross Profit |
2,304.65
|
Expenses | |
Airline Expense | 589.50
|
Auto |
1,767.28
|
Car Rental |
130.92
|
Employee Benefits | 297.65
|
Hotels |
285.31
|
Cleaning |
42.00
|
Travel- Meals and entertainment | 562.10
|
Office Expense |
1350.85
|
Postage |
98.66
|
rent | |
taxes | |
Telephone |
462.00
|
Travel |
426.90
|
Other Expenses | 329.67 |
Total Expenses |
6,342.84
|
================================ | =========== |
Net Income |
(4,038.19)
|
Statement of Cash Flow for the three month period ending September 30, 2001 |
3 Months
|
Cash flow from operating activities | |
Net Income |
(4,038.19)
|
Adjustments to reconcile net income to cash provided by operations | |
Accumulated Depreciation | |
Accounts Receivable |
(1,395.75)
|
Accounts Payable | |
Walter Karl Advance | (908.90) |
Total Adjustments |
(2,304.65)
|
================================ | =========== |
Net Cash provided by operations |
(6,342.84)
|
Cash Flows from financing | |
Proceeds from : | |
Note Payable Crossfield |
6,342.84
|
Other Long Term Liabilities | |
Used For: | |
Note Payable Crossfield | |
Other Long term Liabilities | |
Net Cash used in Financing |
0
|
================================ | =========== |
Net Increase (decrease) in cash |
0.00
|
Statement of Changes in Financial Position for the three month period ending September 30, 2001 |
3 Months
|
Source of Working Capital | |
Net Income |
(4,038.19)
|
Add Backs not requiring working capital | |
Depreciation | |
Working capital from operations |
(4,038.19)
|
Other Sources | |
Note Payable Crossfield |
6,342.84
|
Other Long Term Liabilities | |
Total Sources |
2,304.65
|
Uses of Working Capital | |
Note Payable Crossfield | |
Other Long term Liabilites | |
Total Uses | |
================================ | =========== |
Net change |
(2,304.65)
|
Analysis of components of change | |
Increase (decrease) in Current Assets | |
Accounts Receivable |
(417.55)
|
(Increase) decrease in Current Liabilities | |
Client Fees Receivables |
1,813.30
|
Walter Karl Advance | 908.90 |
Net Change |
(2,304.65)
|
Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations.
On March 9, 1998, pursuant to an Agreement for Purchase and Sale of Specified Business Assets ("Purchase Agreement"), a Promissory Note ("Note"),and a Security Agreement ("Security Agreement") all dated March 9, 1998, Advanced Oxygen Technologies, Inc. (the "Company") purchased certain tangible and intangible assets (the "Assets") including goodwill and rights under certain contracts, from Integrated Marketing Agency, Inc., a California Corporation ("IMA").
Pursuant to an employment agreement dated March 09, 1998 between the Company and John Teuber ("Employment Agreement"), on September 04, 1998 the Company terminated John Teuber for cause without relinquishing any of its rights or remedies.
Pursuant to the Note, the Purchase Agreement, and the Security Agreement between the Company and ("IMA"), the Company on September 04, 1998 exercised its right of "Set Off" of the Note, as defined therein due to IMA's breach of numerous representations, warranties and covenants contained in the Note and certain ancillary documents. The Company further reserved any and all rights and remedies available to it under the Note, Purchase Agreement and Security Agreement.
The Company entered into a two year employment agreement ("NAG Agreement" as contained in Exhibit I of the registrants SEC Form 10-K for the period ending June 30, 1998) with Nancy Gaylord on March 13, 1998. On September 18, 1998, Nancy Gaylord terminated her employment with the Company. The NAG Agreement had no provision for this termination. The Company entered into a lease agreement as contained in Exhibit I of the registrants SEC Form 10-QSB for the period ending September 30, 1998 with America-United Enterprises Inc. on October 01, 1998 and took possession of 4,700 sf. of premises on November 06,1998 in Santa Clarita for its CA location. Currently, this is the only California location of the Company.
On December 9, 1998 the company delivered to IMA, "Notification to Indemnifying Party and Demand for Indemnification for $2,251,266." Pursuant to the Note, the Purchase Agreement, the Security Agreement, and the Employment Agreement (collectively the "Agreements"), the Company demanded that IMA pay $2,251,266 or defend the Company against the Liabilities (as defined therein) due to, among other things, IMA's breach, representations, warranties, and violation of the Agreements.
On January 29, 1999, pursuant to the Purchase Agreement of 1/28/99, Advanced Oxygen Technologies, Inc. ("AOXY") purchased 1,670,000 shares of convertible preferred stock of Advanced Oxygen Technologies, Inc. ("STOCK") and a $550,000 promissory note issued by Advanced Oxygen Technologies, Inc. ("Note") from Integrated Marketing Agency, Inc. ("IMA"). The terms of the Purchase Agreement were: AOXY paid $15,000 to IMA, assumed a Citicorp Computer Equipment Lease, #010-0031648-001 from IMA, delivered to IMA certain tangible business property (as listed in Exhibit A of the Purchase Agreement), executed a one year $5,000 promissory note with IMA, and delivered to IMA a Request For Dismissal of case #PS003684 (restraining order) filed in Los Angeles county superior court. IMA sold, transferred, and delivered to AOXY the Stock and the Note. IMA sold, transferred, assigned and delivered the Note and the Stock to AOXY, executed documents with Citicorp Leasing, Inc. to effectuate an express assumption by AOXY of the obligation under lease #010-0031648-001 in the amount of $44,811.26, executed a UCC2 filing releasing UCC-1 filing #9807560696 filed by IMA on March 13, 1998, and delivered such documents as required. In addition, both IMA and AOXY provided mutual liability releases for the other.
On December 31, 2000, AOXY entered into an agreeement with Eastern Star, ltd, and Baldwin Construction Co (the "Purchasers") whereby the Purchasers will buy three million shares of capital stock of AOXY for one hundred and twenty five thousand dollars pursuant to a purchase agreement (the "Purchase Agreement") contained herein as Exhibit A. The Company has concluded the issuance and delivery of the shares pursuant to the Purchase Agreement. In addition, the Company received a request from Ann Sejeroe for a conversion of her 1 Preferred Share number P 0002 issued April 16, 1998, and in accordance with the restrictions, terms and conditions, as evidenced on the reverse side of the share certificate, the Company issued 333,333 shares bearing a restrictive legend.
The location in Santa Clarita, CA was the location for operations. The Company has abondoned this facility and the Company's sales staff has been eliminated. Current sales are out-sourced through Walter Karl Inc. and Dunn & Bradstreet (see below). The Company derives its revenues mainly from database management.
The Company has a database management contract with Dunn and Bradstreet, and Walter Karl, Inc., a division of InfoUSA, Inc. whereby, Walter Karl, Inc. will broker the company's database .
During the period, the Company significantly reduced its expenses, reduced or discontinued unprofitable operations, and concentrated on database management. The Company continues it efforts to raise capital to support operations and growth, and is actively searching acquisition or merger with another company that would compliment AOXY or increase its earnings potential.
Acquisition Efforts:
The Company continues it efforts to raise capital to support operations and growth, and is actively searching acquisition or merger with another company that would compliment AOXY or increase its earnings potential. The Company has been in discussion with Companies looking to be acquired. AOXY has not negotiated any terms nor proposed any acquisition of any of these companies. In addition, the Company is in discussion with potential lending institutions to assist in financing any proposed acquisition. The Company expects difficulty in financing the growth of the increased business or acquisition and has been concentrating on raising capital and/or obtaining a line of credit.
Forward Looking Statements
Certain statements contained in this report, including statements concerning the Company's future and financing requirements, the Company's ability to obtain market acceptance of its products and the competitive market for sales of small production business' and other statements contained herein regarding matters that are not historical facts, are forward looking statements; actual results may differ materially from those set forth in the forward looking statements, which statements involve risks and uncertainties, including without limitation to those risks and uncertainties set forth in any of the Company's Registration Statement's under the heading "Risk Factors" or any other such heading. In addition, historical performance of the Company should not be considered as an indicator for future performance, and as such, the future performance of the Company may differ significantly from historical performance.
PART II
Item 1: Legal Proceedings
There were no legal proceedings brought against the Company during this period.
Item 6. Exhibits and Reports on Form 8-K
No Reports on Form 8-K were filed in this period, however, a report on Form 8-K was filed on May 14, 2001, whereby the Company has completed the sale to Purchasers (the "Purchasers" as defined in the Purchase Agreement) an amount of three million (3,000,000) shares (the "Regulation S Shares") of the capital stock of AOXY, Inc., ("AOXY") pursuant to the Purchase Agreement ("Purchase Agreement") in an amount to each Purchaser as set forth on Schedule 1 of the Purchase Agreement attached thereto. This report is contained by reference from the Company's 10KSB for the period ending June 30, 2001.
SIGNATURE
In accordance with the requirements of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: November 15, 2001
/s/ Robert E. Wolfe /s/
------------------------------------------
Robert E. Wolfe, Chairman of the Board and
Chief Executive Officer and Principal
Financial Officer