SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15 (d)
of the Securities and Exchange Act of 1934
For the Quarter Ended May 31, 2004
Commission File Number 01-19001
MILLER DIVERSIFIED CORPORATION
----------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Nevada 84-1070932
------------------------------ ----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Mailing Address:
P. O. Box 237
La Salle, Colorado 80645
23360 Weld County Road 35
La Salle, Colorado 80645
-------------------------------------
(Address of Principal Executive Office)
(970) 284-5556
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(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 NO X
----- -----
The number of shares of Common Stock, with a par value of $.0001, that are
outstanding on August 20, 2004, 6,404,640.
Transitional Small Business Disclosure Format: YES NO X
----- -----
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
MILLER DIVERSIFIED CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
- --------------------------------------------------------------------------------
May 31 Aug. 31
2004 2003
- --------------------------------------------------------------------------------
ASSETS
- ------
Current Assets:
Cash $ 364 $ --
Receivables:
Accounts receivable - related parties 7,732 --
-------- --------
Total current assets 8,096 --
-------- --------
Other Assets:
Notes receivable - related parties 21,752 --
Deferred income taxes -- --
Net assets of discontinued operations -- 252,371
-------- --------
Total other assets 21,752 252,371
-------- --------
Total assets $ 29,848 $252,371
======== ========
LIABILITIES
- -----------
Current Liabilities:
Cash overdraft $ -- $ 9,262
Current portion of:
Long-term debt - related party -- 72,503
-------- --------
Total current liabilities -- 81,765
Long-term debt - related party 262,000 --
Accrued interest - related party 10,105 --
-------- --------
Total liabilities 272,105 81,765
-------- --------
Commitments
- -----------
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Continued on next page
MILLER DIVERSIFIED CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS - Continued
- -------------------------------------------------------------------------------
May 31 Aug. 31
2004 2003
- -------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
- --------------------
Preferred stock -- --
Common stock, par value $.0001 per share
25,000,000 shares authorized; 6,404,640
shares issued and outstanding 640 640
Additional paid-in capital 1,351,689 1,867,854
Less: receivable for additional paid-in capital -- (516,165)
Retained earnings (1,594,586) (1,175,723)
Accumulated other comprehensive loss -- (6,000)
----------- -----------
Total stockholders' equity (242,257) 170,606
----------- -----------
Total liabilities and stockholders' equity $ 29,848 $ 252,371
=========== ===========
See Accompanying Notes to Consolidated Financial Statements.
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MILLER DIVERSIFIED CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
Nine Months Ended May 31 2004 2003
- --------------------------------------------------------------------------------
Revenue:
- --------
Total revenue -- --
----------- -----------
Costs and Expenses:
Selling, general, and administrative 53,074 --
Interest on note payable - related party 11,485 8,763
----------- -----------
Total costs and expenses 64,559 (8,763)
----------- -----------
Loss before income taxes (64,559) (8,763)
Income tax expense -- --
----------- -----------
Loss from continuing operations (64,559) (8,763)
----------- -----------
Discontinued Operations:
Loss from operations of disposed net assets (171,680) (288,265)
Loss on disposal of net assets (182,624) --
----------- -----------
(354,304) (288,265)
----------- -----------
NET LOSS $ (418,863) $ (297,028)
=========== ===========
Loss per Common Share:
Loss from continuing operations $ (0.01) $ --
Loss from discontinued operations (0.03) (0.05)
Loss on disposal of net assets (0.03) --
----------- -----------
LOSS PER COMMON SHARE $ (0.07) $ (0.05)
=========== ===========
Weighted average number of common
shares outstanding 6,404,640 6,404,640
=========== ===========
See Accompanying Notes to Consolidated Financial Statements.
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MILLER DIVERSIFIED CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
- -------------------------------------------------------------------------------
Three Months Ended May 31 2004 2003
- -------------------------------------------------------------------------------
Revenue:
- --------
Total revenue -- --
----------- -----------
Costs and Expenses:
Selling, general, and administrative 9,503 --
Interest on note payable - related party 5,039 2,516
----------- -----------
Total costs and expenses 14,542 (2,516)
----------- -----------
Loss before income taxes (14,542) (2,516)
Income tax expense -- --
----------- -----------
Loss from continuing operations (14,542) (2,516)
----------- -----------
Discontinued Operations:
Loss from operations of disposed net assets -- (1,350)
Loss on disposal of net assets -- --
----------- -----------
(14,542) (1,350)
----------- -----------
NET LOSS $ (14,542) $ (3,866)
=========== ===========
Loss per Common Share:
Loss from continuing operations $ -- $ --
Loss from discontinued operations -- --
Loss on disposal of net assets -- --
----------- -----------
LOSS PER COMMON SHARE $ -- $ --
=========== ===========
Weighted average number of common
shares outstanding 6,404,640 6,404,640
=========== ===========
See Accompanying Notes to Consolidated Financial Statements.
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MILLER DIVERSIFIED CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
- ------------------------------------------------------------------------------------------
Nine Months Ended May 31, 2004 2003
- ------------------------------------------------------------------------------------------
Cash Flows from Operating Activities:
Net loss from continuing operations $ (64,559) $ (8,763)
Adjustments to reconcile net loss to net cash flows from
operating activities:
Changes in assets and liabilities:
Increase in accounts receivable - related parties (7,732) --
Increase in accrued interest payable - related parties 10,105 --
----------- -----------
Net cash used in continuing operations (62,186) (8,763)
Net cash provided by (used in) discontinued operations 34,365 (1,215,027)
----------- -----------
Net cash used in operating activities (27,821) (1,223,790)
Cash Flows from Investing Activities:
Increase in note receivable - related party (21,752) --
----------- -----------
Net cash used in continuing operations (21,752) --
Net cash provided by (used in) discontinued operations 46,284 (409,198)
Cash paid in sale of assets (307,281) --
----------- -----------
Net cash used in investing activities (282,749) (409,198)
Cash Flows from Financing Activities:
Proceeds from:
Long-term debt - related party 262,000 --
Principal payments on:
Long-term debt - related party (72,503) (48,604)
Change in cash overdraft (139,695) --
----------- -----------
Net cash provided by (used in) continuing operations 49,802 (48,604)
Net cash provided by (used in) discontinued operations (60,538) 1,663,779
----------- -----------
Net cash provided by (used in) financing activities (10,736) 1,615,175
----------- -----------
Net decrease in cash (321,306) (17,813)
Cash, beginning of period 321,670 214,345
----------- -----------
Cash, end of period $ 364 $ 196,532
=========== ===========
See Accompanying Notes to Consolidated Financial Statements.
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MLLER DIVERSIFIED CORPORATION AND SUBSIDIARY
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
- ---------------------
The consolidated balance sheets as of May 31, 2004 and August 31, 2003, the
consolidated statements of earnings and of cash flows for the three months and
nine months ended May 31, 2004 and 2003 have been prepared by the Company,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements have been condensed or omitted as allowed by
the rules and regulations of the Securities and Exchange Commission.
In preparation of the above-described financial statements, all adjustments of a
normal and recurring nature have been made. The Company believes that the
accompanying financial statements contain all adjustments necessary to present
fairly the results of operations and cash flows for the periods presented.
Further, management believes that the disclosures are adequate to make the
information presented not misleading. It is suggested that these financial
statements be read in conjunction with the annual financial statements and the
notes thereto. The operations for the nine-month period ended May 31, 2004 are
not necessarily indicative of the results to be expected for the year.
Company-owned Cattle:
As a result of the Company's line-of-credit which financed the feeding of
Company-owned cattle not being renewed in January 2003, the remaining
Company-owned cattle were completed and sold by August 31, 2003. No
Company-owned cattle were fed during the three months ended November 30, 2003
during which time the Company was pursuing financing that would allow them to
feed cattle.
The Company had an agreement with a related party, Miller Feed Lots, Inc. (MFL)
to share losses from the Company's fed cattle sales beginning September 1, 2001.
Under the agreement, the amount due from MFL is cancelled if the Company ceases
to feed cattle. The agreement is reported as additional paid-in capital less the
related receivable from MFL. At March 1, 2004, this receivable amounted to
$516,165. In May 2004, the Company's management concluded they had exhausted
their efforts to obtain financing to continue feeding cattle, which triggered
the cancellation of the $516,165 due from MFL and the related additional paid-in
capital.
Notes Payable:
During the quarter ended May 31, 2004 the Company has two notes that have a
combined balance of $262,000. The notes plus accrued interest at 7.5% are due
upon demand. Interest of $5,039 was included in operations for the quarter ended
May 31, 2004. Interest payable at May 31, 2004 totaled $10,105.
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New Accounting Pronouncements
- -----------------------------
Management does not believe there are new accounting standards the
implementation of which will significantly impact the Company's financial
statements.
ITEM 3. CONTROLS AND PROCEDURES
The Company disposed of its active business operations during the fiscal quarter
ended November 30, 2003. As of the end of the period covered by this report, the
Company conducted an evaluation, under the supervision and with the
participation of the Chief Executive Officer and Chief Financial Officer, of the
Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) under the 1934 Act. Based on this evaluation, the Chief Executive
Officer and Chief Financial Officer concluded that the Company's disclosure
controls and procedures had not been effective to ensure that information
required to be disclosed by the Company in reports that it files or submits
under the 1934 Act is recorded, processed, summarized and reported within the
time periods specified in Securities and Exchange Commission rules and forms, in
particular, disclosure controls and procedures relative to off balance sheet
arrangements and guarantees. Consequently, the Company instituted procedures to
ensure that off balance sheet arrangements and guarantees pertaining to cattle
feeding arrangements between the Company and its customers are properly
disclosed in the financial statements and public filings. The Company thereby
effected a change in its internal control over financial reporting beginning
with the Company's November 30, 2003 fiscal quarter. With the disposal of the
Company's cattle feeding business, specific controls relating to cattle feeding
arrangements will no longer pertain to the Company's public filings. However,
general controls over off-balance sheet arrangements and guarantees remain in
effect.
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PART II OTHER INFORMATION
Items 1 through 5 None.
Item 6 Exhibits and reports on form 8-K
a) Exhibits
Exhibit 31 - Certification pursuant to section 302 for
Principle Executive Officer and Principal Financial Officer.
Exhibit 32 - Certification pursuant to section 906 for
Principle Executive Officer and Principal Financial Officer.
b) Reports on form 8-K None filed
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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.
MILLER DIVERSIFIED CORPORATION
------------------------------
(Registrant)
Signature Title Date
- --------- ----- ----
/s/ James E. Miller President, Principal August 30, 2004
- ----------------------------- Executive Officer
James E. Miller Principal Financial
Officer, and Director
/s/ Clark A. Miller Secretary-Treasurer August 30, 2004
- ----------------------------- Principal Marketing
Clark A. Miller Officer
/s/ Norman M. Dean Chairman of the August 30, 2004
- ----------------------------- Board and Director
Norman M. Dean
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