UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 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 number 333-48312
AMERICAN LEISURE HOLDINGS, INC.
----------------------------------------------------
(Exact name of registrant as specified in its charter)
FREEWILLPC.COM, INC.
-------------------------
(Former name of registrant)
Nevada 75-2877111
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Park 80 Plaza East
Saddlebrook, New Jersey 07663
----------------------- --------
(Address of principal executive offices) (Zip Code)
(201) 226-2060
(Registrant's telephone number, including area code)
Check 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, and (2) has been subject to such filing requirements for
the past 90 days. Yes [X] No [ ]
As of November 14, 2002, there were 6,685,974 shares of the
Registrant's common stock, par value $0.001 issued and outstanding.
AMERICAN LEISURE HOLDINGS, INC.
SEPTEMBER 30, 2002 QUARTERLY REPORT ON FORM 10-QSB
TABLE OF CONTENTS
Special Note Regarding Forward Looking Information ..............2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements ............................................3
Item 2. Management's Discussion and Analysis of Financial condition
and Results of Operations........................................8
Item 3. Controls and Procedures..........................................12
PART II - OTHER INFORMATION
Item 1. Legal Proceedings................................................13
Item 2. Changes in Securities and Use of Proceeds........................13
Item 3. Defaults Upon Senior Securities..................................17
Item 4. Submission of Matters to a Vote of Security Holders..............17
Item 5. Other Information................................................18
Item 6. Exhibits and Reports on Form 8-K.................................18
References in this report to "we", "us", "our" and similar terms means
American Leisure Holdings, Inc., a Nevada corporation, formerly FreewillPC.com,
Inc.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
The following cautionary statements identify important factors that
could cause our actual results to differ materially from those projected in the
forward-looking statements made in this Quarterly Report on Form 10-QSB. Any
statements about our beliefs, plans, objectives, expectations, assumptions or
future events or performance are not historical facts and may be
forward-looking. These statements are often, but not always, made through the
use of words or phrases such as "will likely", "are expected to", "should", "is
anticipated", "estimated", "intends", "plans", "projection" and "outlook". Any
forward-looking statements are qualified in their entirety by reference to
various factors discussed throughout this Quarterly Report and discussed from
time to time in our filings with the Securities and Exchange Commission. Among
the significant factors that could cause our actual results to differ materially
from those expressed in the forward-looking statements are:
o the potential risk of delay in implementing our business plan;
o the market for our travel and leisure services; and
o the need for additional financing.
Because the factors referred to above could cause actual results or
outcomes to differ materially from those expressed in any forward-looking
statements, persons should not place undue reliance on any of these
forward-looking statements. In addition, any forward-looking statement speaks
only as of the date on which it is made, and we undertake no obligation to
update any forward-looking statement or statements to reflect events or
circumstances after the date on which the statement is made, to reflect the
occurrence of unanticipated events or otherwise. New factors emerge from time to
time, and it is not possible for us to predict which will arise or to assess
with any precision the impact of each factor on our business or the extent to
which any factor, or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements.
2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets as of September 30, 2002
and December 31, 2001....................................................... 4
Condensed Consolidated Statements of Operations
for the nine months and three months ended September 30, 2002
and September 30, 2001 ..................................................... 5
Statement of Cash Flows
for the nine months and three months ended September 30, 2002
and September 30, 2001 ..................................................... 6
Notes to Interim Condensed Financial Statements.............................. 7
3
AMERICAN LEISURE HOLDINGS, INC. AND SUBSIDIARIES
(Formerly Freewillpc.com, Inc.)
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, 2002 and December 31, 2001
September 30, December 31,
2002 2001
------------ ------------
(Unaudited) (Audited)
ASSETS
Current Assets
Cash and cash equivalent $ 58,430 $ 4,957
Receivables, net 151,854 13,093
Prepaid expenses -- 43,700
Deferred offering costs 136,513 --
------------ ------------
Total Current Assets 346,797 61,750
------------ ------------
Fixed Assets, net 12,234,454 4,722
------------ ------------
Other Assets
Time share holdings 20,000 --
Investments in non-subsidiaries 635,886 --
Art, antiques and collectibles 500,000 --
------------ ------------
Total Other Assets 1,155,886 --
------------ ------------
Total Assets $ 13,737,137 $ 66,472
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued liabilities $ 288,292 $ 11,825
Related party and shareholder loans 1,634,171 3,119
Notes and other loans payable 5,752,783 --
------------ ------------
Total Current Liabilities 7,675,246 14,944
------------ ------------
Stockholders' Equity
Preferred stock, $.001 par value
10,000,000 authorized, 880,000 series "A"
shares issued and outstanding 880 --
Preferred stock, $.001 par value
1,000,000 authorized, 2,500 series "B"
shares issued and outstanding 3 --
Common stock, $.001 par value, 100,000,000
authorized, 6,685,974 issued and outstanding 6,686 4,580
Additional paid-in capital 6,256,172 96,056
Deficit accumulated during the
development stage (201,850) (49,108)
------------ ------------
Total Stockholders' Equity 6,061,891 51,528
------------ ------------
Total Assets $ 13,737,137 $ 66,472
============ ============
4
AMERICAN LEISURE HOLDINGS, INC. AND SUBSIDIARIES
(Formerly Freewillpc.com, Inc.)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Nine Months Ended
September 30, 2002 and 2001
and Inception(June 13, 2000) to September 30, 2002
Nine Months Nine Months Inception
Ended Ended Through
September 30, September 30, September 30,
2002 2001 2002
------------- ------------- -------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $(152,742) $ (3,135) $(201,850)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization 4,015 2,499 9,293
Common stock issued for services 6,000 -- 9,500
Contributed capital 500 1,800
Impairment loss and write-off of fixed assets 5,689 5,689
Changes in assets and liabilities:
(Increase) in prepaid expenses 43,700 -- --
(Increase) in accounts receivable 45,093 (6,217) (151,854)
(Increase) in deferred offering costs -- -- --
Increase in accounts payable 88,244 6,095 288,292
Increase in accrued interest -- -- --
Increase (decrease) in advances from shareholder 48,931 900 48,931
--------- --------- ---------
Net cash used in operating activities 89,430 142 9,801
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
(Increase) in investment in non-consolidated subsidiaries (14,667) -- (14,667)
Acquisition of fixed assets (435,044) -- (435,044)
--------- --------- ---------
Net cash used in investing activities (449,711) -- (449,711)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in mortgages payable 413,754 413,754
Proceeds from issuance of common stock, net -- 45,500 84,586
Contributed capital -- -- --
--------- --------- ---------
Net cash provided by financing activities 413,754 45,500 498,340
--------- --------- ---------
Net Increase (decrease) in Cash 53,473 45,642 58,430
CASH AT BEGINNING PERIOD 4,957 4,480 --
--------- --------- ---------
CASH AT END OF PERIOD $ 58,430 $ 50,122 $ 58,430
========= ========= =========
SUPPLEMENTAL CASH FLOW INFORMATION:
Stock issued in exchange for goods and services
and marketable securities $ 250,000 $ -- $ --
========= ========= =========
Cash paid for interest $ -- $ -- $ --
========= ========= =========
Cash paid for income taxes $ -- $ -- $ --
========= ========= =========
5
AMERICAN LEISURE HOLDINGS, INC. AND SUBSIDIARIES
(Formerly Freewillpc.com, Inc.)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Nine Months
Ended September 30, 2002 and 2001, Three Months Ended
September 30, 2002 and 2001 and Inception(June 13, 2000) to September 30, 2002
Nine Months Nine Months Three Months Three Months Inception
Ended Ended Ended Ended Through
September 30, September 30, September 30, September 30, September 30,
2002 2001 2002 2001 2002
------------------------------------------------------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
REVENUES $ -- $ 10,459 $ -- $ 6,217 $ 29,221
COST OF SALES 271 8,220 -- 4,923 25,154
------------------------------------------------------------------------
Gross profit (271) 2,239 -- 1,294 4,067
------------------------------------------------------------------------
COSTS AND EXPENSES
Depreciation and amortization 2,626 2,500 1,237 833 7,904
General and administrative 113,476 2,874 59,120 971 161,644
Impairment loss 2,013 -- -- -- 2,013
------------------------------------------------------------------------
Total costs and expenses 118,115 5,374 60,357 1,804 171,561
------------------------------------------------------------------------
INCOME(LOSS) FROM OPERATIONS (118,386) (3,135) (60,357) (510) (167,494)
------------------------------------------------------------------------
OTHER INCOME(EXPENSE)
Interest expense (32,000) -- (32,000) -- (32,000)
Write-off of fixed assets (2,356) -- (2,356) -- (2,356)
------------------------------------------------------------------------
Total other income(expense) (34,356) -- (34,356) -- (34,356)
------------------------------------------------------------------------
INCOME(LOSS) BEFORE INCOME TAXES (152,742) (3,135) (94,713) (510) (201,850)
PROVISION FOR INCOME TAXES -- -- -- --
------------------------------------------------------------------------
NET INCOME(LOSS) $ (152,742) $ (3,135) $ (94,713) $ (510) $ (201,850)
========================================================================
Weighted average shares outstanding 4,215,451 4,245,848
========================================================================
Loss per share-basic and diluted $ -- $ --
========================================================================
6
AMERICAN LEISURE HOLDINGS, INC.
NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS
September 30, 2002
Note A - Presentation
---------------------
The condensed balance sheet of the Company as of September 30, 2002, the related
condensed statements of operations for the three months ended September 30, 2002
and 2001 and the nine months ended September 30, 2002 and 2001, and the
statements of cash flows for the three months ended September 30, 2002 and 2001
and the nine months ended September 30, 2002 and 2001, included in the condensed
financial statements include all adjustments (consisting of normal, recurring
adjustments) necessary to summarize fairly the Company's financial position and
results of operations. The results of operations for the three months and nine
months ended September 30, 2002 are not necessarily indicative of the results of
operations for the full year or any other interim period. The information
included in this Form 10-QSB should be read in conjunction with Management's
Discussion and Analysis and Financial Statements and notes thereto included in
the Company's December 31, 2001 Form 10-KSB and the Company's Form 8-K/A filed
October 2, 2002.
7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction
with the Financial Statements and Notes thereto appearing elsewhere in this
Quarterly Report. Certain statements in this Quarterly Report, which are not
statements of historical fact, are forward-looking statements. See "Special Note
Regarding Forward-Looking Information" on Page 2.
Introduction
The character and holdings of the Company has changed substantially
since the preceding fiscal year as set forth below. During the second quarter of
the Companies current fiscal year it acquired certain companies to enter into
the travel and tourism industry. The readers of the current unaudited statements
are referred to the Company's last Form 10Q-SB as filed and any subsequent Form
8-K(s) for a more in-depth view of the Company's financial position, Results of
operations and changes in cash flows. Accordingly, management's discussion as
set forth below focuses primarily on the period from June 14, 2002 to September
30, 2002.
General
The Company has been designed and structured to own, control and direct
a series of companies in the travel and tourism industries so that it can
achieve significant vertical and horizontal integration in the sourcing of, and
the delivery of, corporate and vacation travel services. Our mission is to:
o own and operate vacation hotel/resort properties,
o build large travel club membership bases through various travel
club programs,
o build a large membership base in our vacation and travel clubs,
and
o promote our resort assets and sell travel services and vacation
ownership to those club members and other corporate and vacation
travelers.
8
Acquisitions
In June 2002, we acquired control of several travel related companies,
described below:
American Leisure, Inc. ("ALI")
ALI will be the holding company for all of our Leisure Travel
divisions. It will also package holidays and vacations and sell these within the
trade and through its own tour operations.
Sunstone Golf Resort, Inc. ("SGR")
SGR is currently in the planning stage as a 799 unit vacation
destination resort in Orlando, Florida proposed for the commencement of
development in 2003. We intend to provide development and financing support for
the development of the resort.
American Travel & Marketing Group, Inc. ("ATMG")
We believe that ATMG will generate significant travel business through
the creation of clubs comprised of affinity based travelers. ATMG has developed
a travel club system and travel incentive strategy that creates and fulfills the
travel and incentive needs of corporations, organizations and associations with
significant member databases.
Once the infrastructure has been finalized to communicate and sell to
its affinity-based club databases, we anticipate that ATMG will derive
substantial revenue from annual membership fees and commissions earned on the
sale of travel services.
Leisureshare International, Ltd ("LIP")
LIP, and its subsidiary, Leisureshare International, Inc., a vacation
marketing company, will be dedicated to sales of vacation properties and
vacation club memberships.
In July 2002, we entered into a contract to acquire a controlling
interest of HTS Holdings, Inc., the parent to, among other companies, Hickory
Travel Services, In, which will focus on the fulfillment of all of our
companies' travel needs. We anticipate completing the acquisition in the Fall of
2002.
9
Strategy
Our business model is based on four basic premises:
o Club Creation and Administration. We intend to promote and
service both travel clubs and vacation clubs to derive membership
dues revenue, travel commissions revenue and prospects for
conversion of travel club members to vacation club members. To
enhance membership benefits, we intend to affiliate with vacation
exchange programs and provide finance to members.
o Resort Real Estate. In addition to our current vacation resort
assets, we intend to purchase additional vacation resort assets,
particularly in the Caribbean and Florida resort areas where the
demand for vacation property is strong the majority of the year.
Such resorts assets will likely include the following:
o properties suitable for convergent use for vacation club,
such as suites, one bedroom and two bedroom units;
o properties with contiguous vacant land suitable for further
expansion;
o properties that have consistently sustained at least
break-even occupancy;
o for developable land, acreage suitable for hotel, vacation
resort and/or vacation club development in prime locations
with room for a substantial amenity packages; and
o locations that have appeal throughout the year rather than
limited "seasonal" attraction.
o Vacation Ownership. We intend to market vacation assets and
vacation club memberships to the general public. The membership
bases of our vacation and travel clubs and guests staying at our
resort assets will likely provide an ongoing source of prospects
for our vacation assets and vacation club membership sales.
Revenues from the sale of vacation assets and vacation club
memberships is expected to be a substantial component in our
ability to capitalize the front end of developments and the
equity requirement for resort acquisitions.
10
o Travel Services. We intend to capitalize on the travel
requirements of servicing the travel clubs and vacation clubs to
garner significant group purchasing, branding and third party
branding power. By actively focusing on the demand side coupled
with having the structure to fulfill the travel requirements both
at our resort assets and at other venues, we will seek to obtain
seamless vertical and horizontal integration of services such
that the traveler's entire range of needs can be fulfilled or
provided by us.
Cash Flow Requirements
We will require substantial capital to adequately finance our proposed
acquisitions, meet our obligations under our business model, and provide for our
working capital. We anticipate that we will require approximately $22.5 million
over the next twelve months to fully implement our business model. We anticipate
that we will use such funds as follows:
Program Development and Implementation Costs $16,500,000
Payoff Debt $ 3,000,000
Acquisition Costs $ 1,000,000
Working Capital $ 2,000,000
LIQUIDITY
During the three months ended September 30, 2002, the Company's working Capital
decreased. This was due to administrative and financing costs incurred as
carrying costs of the Company's assets and to maintain its operations. The
Company does not currently have sufficient capital in its accounts, nor
sufficient firm commitments for capital to assure its ability to meet its
current obligations or to continue its planned operations. The Company is
continuing to pursue working capital and additional revenue through the seeking
of the capital it needs to carry on its planned operations. There is no
assurance that any of the planned activities will be successful.
11
CAPITAL RESOURCES
As a result of its limited liquidity, the Company has limited access to
additional capital resources. The Company does not have the capital to totally
fund the obligations that have matured or debts that remain currently payable or
other debts incurred during the most recent fiscal quarter.
The Company has received additional capital through the expansion of vendor
financing and loans from its directors during the most recent quarter.
Though the obtaining of the additional capital is not guaranteed, the management
of the Company believes it will be able to obtain the capital required to meet
its current obligations and actively pursue its planned business activities.
OPERATIONS
The previous operations of the Company were ceased. On June 14, 2002 the Company
acquired American Leisure Holdings, Inc. (hereafter Corporation) and its
subsidiaries. Until the Company obtains the capital required to developed it
properties and businesses and obtain the revenues needed from its operations to
meet its obligations, the Company will be dependent upon sources other than
operating revenues to meet its operating and capital needs. Operating revenues
may never satisfy these needs.
Until the capital is obtained to enter into its planned operations discussed
above, the Company will need additional capital other than that provided through
its operations.
ITEM 3. CONTROLS AND PROCEDURES
Based on the evaluation by Mr. Wright, the chief accounting officer of the
company, of the effectiveness of the company's disclosure controls and
procedures conducted as of a date within 90 days of the filing date of this
quarterly report, Mr. Wright concluded that, as of the evaluation date, (i)
there were no significant deficiencies or material weaknesses of the company's
disclosure controls and procedures, (ii) there were no significant changes in
the internal controls or in other factors that could significantly affect
internal controls subsequent to the evaluation date, and (iii) no corrective
actions were required to be taken.
12
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In June, 2001, Rock Investment Trust, P.L.C., a British limited
liability company, and RIT, L.C., a related Florida limited liability company,
filed suit against Malcolm J. Wright, American Vacation Resorts, Inc., American
Leisure, Inc., Inversora Tetuan, S.A., Sunstone Golf Resort, Inc., and SunGate
Resort Villas, Inc., seeking either the return of an alleged $500,000 investment
or ownership interest in one or more of the defendant entities equivalent to the
alleged investment amount. Defendants have denied all claims and Mr. Wright,
American Vacation Resorts, Inc., American Leisure, Inc., Inversora Tetuan, S.A.,
Sunstone Golf Resort, Inc., and SunGate Resort Villas, Inc. have counterclaimed
against Rock Investment Trust and its principal, Roger Smee, seeking damages in
excess of $10 million, assuming success on all aspects of the litigation. The
litigation is in the discovery phase and is not currently set for trial. While
many depositions and other discovery of facts remains to be done, based on the
status of the record developed thus far, counsel believes that Rock Investment
Trust's and RIT's claims are without merit and that the counterclaim will be
successful. The amount of damages which may be recovered on the counterclaim is
subject to a variety of factors and considerations.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
Issuance of Senior Securities
On June 14, 2002, in connection with the closing of the acquisition of
American Leisure Corporation (formerly American Leisure Holdings, Inc.) ("ALC"),
we authorized the issuance of up to 1,000,000 shares of Series A Preferred
Stock, of which 880,000 were issued to certain debt holders of ALC. Our Series A
Preferred Stock has the following rights, privileges and preferences:
o The Series A Preferred Stock has a liquidation value of $10.00
per share, which is senior to the liquidation rights of our
common shareholders;
13
o The holders of Series A Preferred Stock are entitled to
cumulative dividends at the rate of $1.20 per share per year,
which such dividends must be paid before any dividends may be
paid to our common shareholders;
o Each share of Series A Preferred Stock is convertible, at the
option of the holder, into ten shares of Common Stock. The
conversion rate is adjusted for stock splits and dividends, and
similar events, or if the market price of the Common Stock is
below $1.00, subject to certain limitations.
o The holders of Series A Preferred Stock have voting rights with
our common shareholders as a single class based on the conversion
rate. Currently, each share of Series A Preferred Stock is
entitled to ten votes.
o We may redeem all of the Series A Preferred stock outstanding, if
any, in June 2007, equal to the liquidation value plus any
accrued and unpaid dividends.
On August 4, 2002, in connection with the acquisition of certain call
center equipment and the acquisition of Hickory Travel Systems, Inc. we
authorized the issuance of up to 1,000,000 shares of Series B Preferred Stock,
of which 2,500 were issued to acquire the call center equipment. Our Series B
Preferred Stock has the following rights, privileges and preferences:
o The Series B Preferred Stock has a liquidation value of $100.00
per share;
o The holders of Series B Preferred Stock are entitled to
cumulative dividends at the rate of $12.00 per share per year;
o The liquidation rights of the holders of Series B Preferred Stock
are senior to the holders of Common Stock but junior to the
Series A Preferred Stock;
14
o Each share of Series B Preferred Stock shall be convertible, at
the option of the holder thereof, at one time, into such number
of paid and nonassessable shares of Common Stock (the "Conversion
Rate") calculated by dividing the Liquidation Value by the Market
Price (as defined herein) but such Conversion Rate shall not be
greater than twenty (20) (the "High Conversion Rate") and not
less than twelve and one-half (12.5) (the Low Conversion rate").
Such initial High and Low Conversion Rates shall be subject to
adjustment as provided. Each share of Series B Preferred Stock
shall be automatically converted into such number of paid and
nonassessable shares of Common Stock on the date six (6) months
after the Company has listed its Common Stock for trading on the
American Stock Exchange (the "Automatic Conversion Date") at the
Conversion Rate determined on the Automatic Conversion Date.
o The holders of Series B Preferred Stock have voting rights with
the holders of Common Stock as a single class based on the
conversion rate.
o The Registrant may redeem all of the Series B Preferred stock
outstanding, if any, in August 2007, equal to the liquidation
value plus any accrued and unpaid dividends.
Sales of Our Equity Securities Not Registered Under the Securities Act of 1933
On May 15, 2002, our Board of Directors authorized the issuance of
20,000 shares of our common stock to Tripoint Capital in connection with its
compensation for advisory services provided to us. These securities were sold
under the exemptions from registration provided by Section 4(2) of the Act and
Regulation D promulgated under the Act. Neither we nor any person acting on our
behalf offered or sold the securities by means of any form of general
solicitation or general advertising. Tripoint Capital represented in writing
that it acquired the securities for its own account. A legend was placed on the
certificates stating that the securities have not been registered under the
Securities Act and cannot be sold or otherwise transferred without an effective
registration or an applicable exemption.
On May 20, 2002, our Board of Directors authorized the issuance of up
to 3,000,000 shares of our common stock pursuant to a private placement at the
purchase price of $1.50 per share. We sold 36,009 shares in such private
placement. These securities were sold under the exemptions from registration
provided by Regulation S promulgated under the Securities Act (the "Act").
15
Neither we nor any person acting on our behalf offered or sold the securities by
means of any form of general solicitation or general advertising. Each investor
represented in writing that he or she acquired the securities for his or her own
account. A legend was placed on the certificates stating that the securities
have not been registered under the Securities Act and cannot be sold or
otherwise transferred without an effective registration or an applicable
exemption.
On May 20, 2002, our Board of Directors authorized the issuance of
5,000 shares of our common stock to James Leaderer in connection with his
compensation for serving as our president and chief executive officer. These
securities were sold under the exemptions from registration provided by Section
4(2) of the Act and Regulation D promulgated under the Act. Neither we nor any
person acting on our behalf offered or sold the securities by means of any form
of general solicitation or general advertising. Mr. Leaderer represented in
writing that he acquired the securities for his own account. A legend was placed
on the certificates stating that the securities have not been registered under
the Securities Act and cannot be sold or otherwise transferred without an
effective registration or an applicable exemption.
On June 14, 2002, we completed the acquisition of American Leisure
Corporation (formerly American Leisure Holdings, Inc.) ("ALC"). The acquisition
was completed by the purchase of 99% of the outstanding capital stock of ALC. As
consideration, we issued 880,000 shares of our Series A Preferred Stock and
4,819,665 shares of our common stock. These securities were sold under the
exemptions from registration provided by Section 4(2) of the Act and Regulation
D and Regulation S promulgated under the Act. Neither we nor any person acting
on our behalf offered or sold the securities by means of any form of general
solicitation or general advertising. Each purchaser represented in writing that
16
he or she acquired the securities for his or her own account. A legend was
placed on the certificates stating that the securities have not been registered
under the Securities Act and cannot be sold or otherwise transferred without an
effective registration or an applicable exemption.
On August 6, 2002 we completed the acquisition of various call enter
equipment. As consideration, we issued 2,500 shares of our Series B Preferred
Stock. These securities were sold under the exemptions from registration
provided by Section 4(2) of the Act and Regulation D and Regulation S
promulgated under the Act. Neither we nor any person acting on our behalf
offered or sold the securities by means of any form of general solicitation or
general advertising. Each purchaser represented in writing that he or she
acquired the securities for his or her own account. A legend was placed on the
certificates stating that the securities have not been registered under the
Securities Act and cannot be sold or otherwise transferred without an effective
registration or an applicable exemption.
ITEM 3. DEFAULTS IN SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On May 11, 2002, a shareholder owning a majority of our outstanding
common stock, acting by written consent, appointed James Leaderer to serve as
our sole director.
On May 11, 2002, our sole director authorized the adoption of the
Amended and Restated Articles of Incorporation and Amended and Restated Bylaws
and recommended that holders of record of our common stock as of May 13, 2002,
approve, by written consent, such adoption. On May 13, 2002, a shareholder
owning a majority of our outstanding common stock, acting by written consent,
approved the adoption of the Amended and Restated Articles of Incorporation and
Amended and Restated Bylaws, copies of which are annexed to this Form 10-QSB as
exhibits.
17
On June 8, 2002, our sole director authorized the adoption of the
amendment to our Amended and Restated Articles of Incorporation and recommended
that holders of record of our common stock as of June 9, 2002, approve, by
written consent, such adoption. On June 9, 2002, shareholders owning a majority
of our outstanding voting stock, acting by written consent, approved the
adoption of the amendment to our Amended and Restated Articles of Incorporation,
a copy of which is annexed to this Form 10-QSB as an exhibit.
ITEM 5. OTHER INFORMATION
Form 8-K; Item 4; Changes in Registrant's Certifying Accountants
On August 12, 2002, we appointed the accounting firm of Marc Lumer &
Company of San Francisco, California, as the principal independent accountants
for the quarters ended June 30, 2002 and September 30, 2002 and for the fiscal
year ended December 31, 2002 to replace J.S. Osborn, P.C. who was dismissed as
the principal independent accountants effective with such appointment. The
decision to change the principal independent accountants was not approved by our
Board of Directors. In November, we appointed Malone & Bailey, PLLC to be our
principal auditors for the quarter ended September 30, 2002, to restate the June
30, 2002 financials and for the fiscal year ended December 31, 2002.
During the two most recent fiscal years and interim period subsequent
through the quarter ended March 31, 2002, there have been no disagreements with
J.S. Osborn, P.C. or Marc Lumer & Company, on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedure or any other reportable events.
J.S. Osborn, P.C.'s report on the financial statements for each of the
past two years contained a qualification about our ability to continue as a
going concern. Except for the foregoing going concern qualification, J.S.
Osborn, P.C.'s report on the financial statements for each of the past two years
contained no adverse opinion or disclaimer of opinion and was not qualified or
modified as to uncertainty, audit scope or accounting principles.
18
We have provided J.S. Osborn, P.C. with a copy of this disclosure, and
requested that J.S. Osborn, P.C. furnish a letter to the Commission stating
whether it agrees with the above statements. (A copy of that letter is filed as
Exhibit 16 to this Form 10-QSB).
Form 8-K; Item 9; Regulation FD Disclosure
In accordance with 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, our Chief Executive Officer and
Chief Financial Officer executed the following written statements which
statements accompanied the filing with the Securities and Exchange Commission of
this Quarterly Report on Form 10-QSB:
Certification Pursuant To 18 U.S.C. Section 1350,
As Adopted Pursuant To
Section 906 of The Sarbanes-Oxley Act of 2002
I, L. William Chiles, Chief Executive Officer of American Leisure Holdings, Inc.
(the "Company"), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, 18 U.S.C. Section 1350, that:
o the Company's Quarterly Report on Form 10-QSB for the fiscal
quarter ended September 30, 2002, as filed with the Securities
and Exchange Commission on the date hereof (the "Report") fully
complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and
o the information contained in the Report fairly presents, in all
material respects, the financial condition and result of
operations of the Company for the periods presented therein.
Certification Pursuant To 18 U.S.C. Section 1350,
As Adopted Pursuant To
Section 906 of The Sarbanes-Oxley Act of 2002
I, Malcolm J. Wright, Chief Financial Officer of American Leisure Holdings, Inc.
(the "Company"), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, 18 U.S.C. Section 1350, that:
o the Company's Quarterly Report on Form 10-QSB for the fiscal
quarter ended September 30, 2002, as filed with the Securities
and Exchange Commission on the date hereof (the "Report") fully
complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and
o the information contained in the Report fairly presents, in all
material respects, the financial condition and result of
operations of the Company for the periods presented therein.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
None
(b) Reports on Form 8-K.
None
19
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
AMERICAN LEISURE HOLDINGS, INC.
Dated: November 25, 2002 By: /s/ L. William Chiles
----------------------
L. William Chiles
Chief Executive Officer
Dated: November 25, 2002 By: /s/ Malcolm J. Wright
----------------------
Malcolm J. Wright
Chief Financial Officer