U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2004.
[_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _______ to ________
COMMISSION FILE NUMBER: 000-28519
ATNG INC.
(Name of small business issuer in its charter)
NEVADA 76-0510754
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1549 N. LEROY ST., SUITE D- 1,000, FENTON, MICHIGAN 48430
(Address of principal executive offices) (Zip Code)
(810) 714-1011
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 [_]
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: As of September 30, 2004, the
issuer had 573,244,906 shares of its common stock issued and outstanding.
Transitional Small Business Disclosure Format (check one):
Yes [_] No [X]
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION. . . . . . . . . . . . . . . . . . . . . 3
Item 2. Management's Discussion and Analysis or Plan of Operation . 10
Item 3. Controls and Procedures . . . . . . . . . . . . . . . . . . 11
PART II - OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . 12
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . 12
Item 2. Changes in Securities . . . . . . . . . . . . . . . . . . . 12
Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . . . 12
Item 4. Submission of Matters to a Vote of Security Holders . . . . 12
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . 12
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . 12
SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 14
CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 15
CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 16
CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 17
2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
The financial statements and related notes are included as part of this
Quarterly Report as indexed in the appendix.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.
FORWARD-LOOKING INFORMATION
Much of the discussion in this Item is "forward looking" as that term is
used in Section 27A of the Securities Act and Section 21E of the Securities
Exchange Act of 1934. Actual operations and results may materially differ from
present plans and projections due to changes in economic conditions, new
business opportunities, changed business conditions, and other developments.
Other factors that could cause results to differ materially are described in our
filings with the Securities and Exchange Commission.
The following are factors that could cause actual results or events to
differ materially from those anticipated, and include, but are not limited to
general economic, financial and business conditions, changes in and compliance
with governmental laws and regulations, including various state and federal
environmental regulations, our ability to obtain additional financing from
outside investors and/or bank and mezzanine lenders; and our ability to generate
sufficient revenues to cover operating losses and position us to achieve
positive cash flow.
Readers are cautioned not to place undue reliance on the forward-looking
statements contained herein, which speak only as of the date hereof. We believe
the information contained in this Form 10-QSB to be accurate as of the date
hereof. Changes may occur after that date. We will not update that
information except as required by law in the normal course of its public
disclosure practices.
Additionally, the following discussion regarding our financial condition
and results of operations should be read in conjunction with the financial
statements and related notes contained in Item 1 of Part I of this Form 10-QSB,
as well as the financial statements in Item 7 of Part II of our Form 10-KSB for
the fiscal year ended December 31, 2003.
MANAGEMENT'S PLAN OF OPERATION
General. We are approximately two years into a turnaround period.
Affiliations with and/or acquisitions of several entities are in process that we
expect to provide steady significant growth to us. The first acquisition, Blue
Kiwi Inc., was completed during the 3rd Quarter of 2004. Our revitalization
process began in the fall of 2002 when the former management team departed. At
that time Robert Simpson assumed the role of chief executive officer and the
operating objectives were as follows:
- - Raise operating capital to sustain operations.
- - Settle all old debts incurred prior to the 4th quarter of 2002 and keep all
debt current going forward.
- - Manage the legal issues, including those inherited from the prior
management team.
- - Get the Company profitable.
- - Create shareholder value.
The first four objectives were achieved by or during 2004 as follows:
- - We provided enough working capital for a turnaround and revitalization.
3
- - All of the inherited debts were settled with the exception of a few that
could not be validated and the value of those is less than $125,000.00
compared to the $9,000,000.00 in debt and legal exposure inherited from the
prior management. Most of the liabilities currently shown in the financials
are expected to be written off in approximately 24 months.
- - All the legal issues inherited from the prior management have been settled
and there are no pending legal actions.
The acquisition of Blue Kiwi Inc. is complete and finally, the products are
beginning to sell. The national ad campaign did not meet our expectations. Our
new product development coordinator, our formulator, Steve Rittmanic, and the
products we will introduce over the next 12 months are expected to boost sales
and profits.
An affiliate, ZannWell Inc., is now a growing company with a similar
business model to ours. We sold our rights to Future Beverages Inc. to
ZannWell for cash and other considerations. The Future Beverages products will
be the primary product line for ZannWell.
We have three promising patents, one for multiple sclerosis and chronic
fatigue, one for an activating virus and one for analog compression technology.
At least two of these show promise for the next couple of years.
We have several companies that we manage for a share of the income, but
have no ownership interest. These companies are:
- - Blue Kiwi Inc.
- - Pathobiotek-Cryptobe
- - OILX Inc.
- - Danitom BBQ Inc.
- - CarZann Inc.
- - SKS Skin Care
- - TMCP Natural Products
- - Lucy's Veterinary Products
- - ZannWell Inc.
- - Future Beverages Inc.
- - Zann-MI Corp.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2004 COMPARED TO THE CORRESPONDING PERIOD
IN 2003
There were no revenues.
4
Operating Expenses. During the three-month period ended September 30,
2004, operating expenses were $3,590,639 as compared to $4,051 for the same
period in 2003. The increase in professional expenses, acquisition expenses and
operating expenses are mainly a result of launching two new products and related
expenses.
We intend to continue to find ways to expand our business, including
through acquisitions. We believe that revenues and earnings will increase as we
grow. We anticipate that we will incur losses in the future if we are able to
expand our business and the marketing of our Internet technology through
acquisitions. The losses will be created to the extent of the excess of
technology development and marketing expenses over the income from operations.
The operating losses as shown may be perceived as alarming and possibly
indicate a downward spiral leading to the demise of the company. However, from
management's point of view, there is a bright side to the operating losses which
have accumulated to approximately $27,000,000. The very positive side of this
operating loss will be beneficial to us as our affiliated business units become
profitable in 2005.
LIQUIDITY AND CAPITAL RESOURCES
Nine months ended September 30, 2004 compared to the corresponding period
in 2003.
Operating Expenses. During the nine-month period ended September 30, 2004,
operating expenses were $5,402,648 as compared to $619,951 for the same period
in 2003. The increase in professional expenses, acquisition expenses and
operating expenses are mainly a result of launching two new products and related
expenses.
We intend to continue to find ways to expand our business, including
through acquisitions. We believe that revenues and earnings will increase as we
grow. We anticipate that we will incur losses in the future if we are able to
expand our business and the marketing of our Internet technology through
acquisitions. The losses will be created to the extent of the excess of
technology development and marketing expenses over the income from operations.
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
We believe that we do not have any material exposure to interest or
commodity risks. We are exposed to certain economic and political changes in
international markets where we compete, such as inflation rates, recession,
foreign ownership restrictions, and trade policies and other external factors
over which we have no control.
Our financial results are quantified in U.S. dollars and a majority of our
obligations and expenditures with respect to our operations are incurred in U.S.
dollars. Although we do not believe we currently have any materially
significant market risks relating to our operations resulting from foreign
exchange rates, if we enter into financing or other business arrangements
denominated in currency other than the U.S. dollars, variations in the exchange
rate may give rise to foreign exchange gains or losses that may be significant.
5
We currently have no material long-term debt obligations. We do not use
financial instruments for trading purposes and we are not a party to any
leverage derivatives.
As discussed by our accountants in the audited financial statements
included in Item 7 of our Annual Report on Form 10-KSB, our revenue is currently
insufficient to cover its costs and expenses. The management anticipates
raising any necessary capital from outside investors coupled with bank or
mezzanine lenders. As of the date of this report, we have not entered into any
negotiations with any third parties to provide such capital.
OUR INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS HAVE STATED IN THEIR REPORT
INCLUDED IN OUR DECEMBER 31, 2003 FORM 10-KSB, THAT WE HAVE INCURRED OPERATING
LOSSES IN THE LAST TWO YEARS, AND THAT WE ARE DEPENDENT UPON MANAGEMENT'S
ABILITY TO DEVELOP PROFITABLE OPERATIONS. THESE FACTORS AMONG OTHERS MAY RAISE
SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN.
RECENT DEVELOPMENTS
We have completed the acquisition of Blue Kiwi Inc. Blue Kiwi has two
products on the market, the Fatigue Pack and the PMS Pack. The national
television advertising begins in approximately two weeks along with a
comprehensive media campaign for enhancing sales and achieving our revenue
targets.
On August 24, 2004, we filed a Certificate of Designation establishing
Series A Preferred Stock. 20,000,000 shares have been designated as Series A
Preferred Stock. Each share of the Series A Preferred Stock is convertible into
10 fully paid and nonassessable shares of the Common Stock. On all matters
submitted to a vote of the holders of the Common Stock, including, without
limitation, the election of directors, a holder of shares of the Series A
Preferred Stock is entitled to one vote on such matters multiplied by the number
of shares of the Series A Preferred Stock held by such holder.
On August 24, 2004, we filed a Certificate of Designation establishing
Series C Preferred Stock. 20,000,000 shares have been designated as Series C
Preferred Stock. The Series C Preferred Stock is not convertible into shares of
the Common Stock. On all matters submitted to a vote of the holders of the
Common Stock, including, without limitation, the election of directors, a holder
of shares of the Series C Preferred Stock shall be entitled to 100 votes on such
matters equal to the number of shares of the Series C Preferred Stock held by
such holder at the record date for the determination of stockholders entitled to
vote on such matters.
On August 27, 2004, we filed a Certificate of Correction for the
Certificate of Designation establishing Series A Preferred Stock. The sole
purpose of the Certificate of Correction was to include the Conversion Notice
for the Series A Preferred Stock, which was inadvertently omitted from the
August 24, 2004 filing of the Certificate of Designation establishing Series A
Preferred Stock.
On December 3, 2004, we plan to effect the following corporate actions:
- - Amend our articles of incorporation to change our name from "ATNG Inc." to
"Zann Corp.";
- - Approve an amendment to our articles of incorporation to increase the
authorized number of shares of our common stock from 900,000,000 to
4,000,000,000 shares;
- - Approve an amendment to our articles of incorporation to increase the
authorized number of shares of our preferred stock from 50,000,000 to
350,000,000 shares;
- - Grant discretionary authority to our board of directors to implement a
reverse stock split of our common stock on the basis of one
post-consolidation share for up to each 900 pre-consolidation shares to
occur at some time within 12 months of the date of this information
statement, with the exact time of the reverse split to be determined by the
board of directors; and
6
- - Grant discretionary authority to the directors to implement a proposal for
ATNG Inc. to become a Business Development Corporation to occur at some
time within 12 months of the date of this information statement, with the
exact time of such conversion to be determined by the board of directors.
Dr. Simpson holds 282,000 shares of our common stock, 1,800,000 shares of
our Series A preferred stock, and 10,000,000 shares of our Series C preferred
stock. Each share of our common stock is entitled to one vote on all matters
brought before the stockholders, each share of our Series A preferred stock
outstanding entitles the holder to one vote of the common stock on all matters
brought before the stockholders, and each share of our Series C preferred stock
outstanding entitles the holder to 100 votes of the common stock on all matters
brought before the stockholders. Therefore, Dr. Simpson will have the power to
vote 10,002,082,000 shares of the common stock, which number exceeds the
majority of the 822,226,906 issued and outstanding shares of our common stock on
the record date.
Dr. Simpson will vote in favor of the proposed amendments to our articles
of incorporation and for the grant of discretionary authority to the board with
respect to the stock split and conversion to a Business Development Corporation.
Dr. Simpson will have the power to pass the proposed corporate actions without
the concurrence of any of our other stockholders.
OFF-BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet arrangements.
ITEM 3. CONTROLS AND PROCEDURES.
Disclosure controls and procedures are controls and other procedures that
are designed to ensure that information required to be disclosed by us in the
reports that we file or submit under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the Securities and
Exchange Commission's rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that
information required to be disclosed by us in the reports that we file under the
Exchange Act is accumulated and communicated to our management, including our
principal executive and financial officers, as appropriate to allow timely
decisions regarding required disclosure.
Evaluation of Disclosure and Controls and Procedures. As of the end of the
period covered by this Quarterly Report, we conducted an evaluation, under the
supervision and with the participation of our chief executive officer and chief
financial officer, of our disclosure controls and procedures (as defined in
Rules 13a-15(e) of the Exchange Act). Based on this evaluation, our chief
executive officer and chief financial officer concluded that our disclosure
controls and procedures are effective to ensure that information required to be
disclosed by us in reports that we file or submit under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in Securities and Exchange Commission rules and forms.
Changes in Internal Controls Over Financial Reporting. There was no change
in our internal controls, which are included within disclosure controls and
procedures, during our most recently completed fiscal quarter that has
materially affected, or is reasonably likely to materially affect, our internal
controls.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
As of the date of this report, we are not involved in any legal
proceedings.
ITEM 2. CHANGES IN SECURITIES.
None.
7
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
EXHIBIT NO. IDENTIFICATION OF EXHIBIT
- ----------- -------------------------
3.1** Articles of Incorporation
3.2* Certificate of Designation for the Series A Preferred Stock, filed with the Secretary of State of
Nevada on August 24, 2004.
3.3* Certificate of Designation for the Series C Preferred Stock, filed with the Secretary of State of
Nevada on August 24, 2004.
3.4* Certificate of Correction for the Certificate of Designation establishing Series A Preferred
Stock, filed with the Secretary of State of Nevada on August 27, 2004.
3.5** Bylaws
10.1** Blue Kiwi Acquisition Agreement.
31.1* Certification of Robert C. Simpson, Chief Executive Officer of ATNG Inc., pursuant to 18
U.S.C. Sec.1350, as adopted pursuant to Sec.302 of the Sarbanes-Oxley Act of 2002.
31.2* Certification of Robert C. Simpson, Chief Financial Officer of ATNG Inc., pursuant to 18
U.S.C. Sec.1350, as adopted pursuant to Sec.302 of the Sarbanes-Oxley Act of 2002.
32.1* Certification of Robert C. Simpson, Chief Executive Officer of ATNG Inc., pursuant to 18
U.S.C. Sec.1350, as adopted pursuant to Sec.906 of the Sarbanes-Oxley Act of 2002.
32.2* Certification of Robert C. Simpson, Chief Financial Officer of ATNG Inc., pursuant to 18
U.S.C. Sec.1350, as adopted pursuant to Sec.906 of the Sarbanes-Oxley Act of 2002
8
__________
* Filed herewith.
** Previously filed.
(b) Reports on Form 8-K.
- - On July 22, 2004 we filed a Form 8-K to report changes in our certifying
accountant.
- - On August 24, 2004 we filed a Form 8-K to report the Acquisition of Blue
Kiwi, Inc.
- - On October 25, 2004, we filed an Amended Current Report on Form 8-K/A to
file the financial statements of Blue Kiwi, Inc.
8
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ATNG INC.
Dated November 22, 2004.
By /s/ Robert C. Simpson
---------------------------------------
Robert C. Simpson,
President and Chief Executive Office
9
Appendix F:
ATNG, INC.
CONSOLIDATED BALANCE SHEET
September 30, 2004
(Unaudited)
ASSETS
Current Assets
Cash $ 15,602
Prepaid expenses 785
-------------
Total Current Assets 16,387
Other Assets 12,400
Total Assets $ 28,787
=============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable $ 412,791
Accrued expenses 369,257
Note payable-related party 1,750
Notes payable-others 212,855
-------------
Total Current Liabilities 996,653
-------------
Stockholders' Deficit
Common stock, $.001 par value, 900,000,000 shares
authorized, 573,244,906 shares issued and outstanding 573,245
Preferred stock,
Series A, $.001 par, 20,000,000 shares authorized,
2,154,700 shares issued and outstanding 2,154
Series C, $.001 par, 20,000,000 shares authorized
10,000,000 issued and outstanding 20,000
Paid in capital 25,567,838
Accumulated deficit (27,131,103)
-------------
Total Stockholders' Deficit (967,866)
-------------
Total Liabilities and Stockholders' Deficit $ 28,787
=============
ATNG, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
Ended September 30, 2004 and 2003
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
------------- ------------ ------------- ------------
Revenue $ 577 $ - $ 2,216 $ -
General & administrative expense (3,590,639) $ (4,051) (5,402,648) $ (619,951)
Debt forgiveness income - - 1,037,373 -
Interest expense (12,859) - (12,835) -
------------- ------------ ------------- ------------
NET LOSS $ (3,602,921) $ (4,051) $ (4,375,894) $ (619,951)
============= ============ ============= ============
Basic and diluted loss per share $ (0.01) $ (0.00) $ (0.01) $ (0.01)
============= ============ ============= ============
Weighted average shares outstanding 519,379,080 47,826,543 439,387,624 56,863,087
============= ============ ============= ============
ATNG, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, 2004 and 2003
(Unaudited)
2004 2003
------------ ----------
Cash Flows Used in Operating Activities
Net Loss $(4,375,894) $(619,951)
Adjustments to reconcile net loss to net cash
used in operating activities:
Shares issued for services 4,897,732 801,995
Stock option expense 43,554 -
Imputed interest 106 -
Debt forgiveness (1,037,373) -
Changes in:
Prepaid expenses (785) (204,785)
Accounts payable (188,647) 57,269
Accounts payable - related (9,548) -
Accrued expenses 12,771 -
------------ ----------
Net Cash provided by (used) in Operating Activities (658,084) 34,528
------------ ----------
Cash Flows Used in Investing Activities:
Increase in other assets (12,400) -
------------ ----------
Cash Flows from Financing Activities:
Proceeds from related party 113,750 -
Proceeds from sale of Common Stock 294,358 -
Repayment of note payable to related party (90,000) (25,000)
------------ ----------
Net Cash provided by (used) in Financing Activities 318,108 (25,000)
------------ ----------
Net Change in Cash (352,376) 9,528
Cash at beginning of period 367,978 -
------------ ----------
Cash at end of period $ 15,602 $ 9,528
============ ==========
SUPPLEMENTAL DISCLOSURES:
Non-Cash Transactions:
Preferred stock for debt forgiveness $ 20,026 $ -
Related party forgiveness of debt $ 122,000 $ -
ATNG, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited interim financial statements of ATNG, Inc. ("ATNG")
have been prepared in accordance with accounting principles generally accepted
in the United States of America and the rules of the Securities and Exchange
Commission ("SEC"), and should be read in conjunction with the audited financial
statements and notes thereto contained in ATNG's Annual Report filed with the
SEC on Form 10-KSB. In the opinion of management, all adjustments, consisting of
normal recurring adjustments, necessary for a fair presentation of financial
position and the results of operations for the interim periods presented have
been reflected herein. The results of operations for interim periods are not
necessarily indicative of the results to be expected for the full year. Notes to
the financial statements which would substantially duplicate the disclosure
contained in the audited financial statements for 2003 as reported in the 10-KSB
have been omitted.
NOTE 2 - STOCK BASED COMPENSATION
ATNG accounts for its employee stock-based compensation plans under Accounting
Principles Board ("APB") Opinion No. 25, Accounting for Stock Issued to
Employees. ATNG granted 116,000,000 options to purchase common stock to
employees in the nine months ending September 30, 2004. All options vest
immediately, have an exercise price of 90 percent of market value on the date of
grant and expire 10 years from the date of grant. ATNG recorded compensation
expense of $43,554 under the intrinsic value method during the nine months ended
September 30, 2004.
The following table illustrates the effect on net loss and net loss per share if
ATNG had applied the fair value provisions of FASB Statement No. 123, Accounting
for Stock-Based Compensation, to stock-based employee compensation.
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
------------ ----------- ------------ -----------
Net income (loss) $(3,602,921) $ (4,051) $(4,375,894) $ (619,951)
Add: stock based compensation
determined under intrinsic
value based method 43,554 - 43,554 -
Less: stock based compensation
determined under fair value
based method (434,446) - (434,446) -
------------ ----------- ------------ -----------
Pro forma net loss $(3,993,813) $ (4,051) $(4,766,786) $ (619,951)
============ =========== ============ ===========
Basic and diluted net loss per share
As reported $ (.01) $ (.00) $ (.01) $ (.01)
============ =========== ============ ===========
Pro forma $ (.01) $ (.00) $ (.01) $ (.01)
============ =========== ============ ===========
NOTE 3 - EQUITY
There are three classes of preferred stock, A, B & C. Each share of Series A and
B is convertible at the option of the holder into 10 shares common stock. Series
C is not convertible, but each share has 100 votes.
During the nine months ended September 30, 2004, employees exercised options to
acquire 76,018,000 shares of common stock on a cashless basis through an outside
broker. The broker sold the shares on the open market and ATNG received proceeds
totaling $294,358
During the nine months ended September 30, 2004, ATNG issued 1,036,000 shares of
Series A preferred stock for services. The shares were valued at $49,382.
During the nine months ended September 30, 2004, ATNG issued 118,700 shares of
Series A preferred stock for $20,026 of debt owed to a related party. The shares
were valued at 10 times the equivalent market stock price for ATNG common stock
because the preferred is convertible into common stock at any time by holders.
During the nine months ended September 30, 2004, ATNG issued 5,000,000 shares of
Series C preferred stock for services. The shares were valued at $2,800,000.
During the nine months ended September 30, 2004, ATNG issued 255,746,900 shares
of common stock for services. The shares were valued at $2,048,350.
NOTE 4 - DEBT FORGIVENESS INCOME
During the nine months ended September 30, 2004, vendors forgave $865,028 owed
to them and ex-employees forgave salaries owed to them in the amount of $36,100.
During the nine months ended September 30, 2004, debt holders forgave $136,245
owed to them. ATNG recognized these amounts in debt forgiveness income.
NOTE 5- NOTE PAYABLE RELATED PARTY
During the nine months ended September 30, 2004, ATNG contributed $122,000 of
debt owed to related parties to additional paid in capital.
During the nine months ended September 30, 2004, ATNG received proceeds of
$113,750 and repaid $90,000 to related parties for notes payable.
NOTE 6 - SUBSEQUENT EVENTS
In October and November 2004, employees' exercised options to acquire
254,000,000 shares of common stock on a cashless basis through an outside
broker.