SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(Mark One)
[x] Quarterly report under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 30, 2002
[ ] Transition report under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from to
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Commission file number 0-22388
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NEXTGEN COMMUNICATIONS CORPORATION
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(Exact Name of Small Business Issuer as Specified in Its Charter)
Delaware 99-0273889
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(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
11850 Jones Road, Houston, Texas 77070
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(Address of Principal Executive Offices)
(281) 970-9859
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(Issuer's Telephone Number, Including Area Code)
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(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
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
---- ----
The number of shares outstanding of the registrant's common stock,
$.001 par value per share, as of November 11, 2002, was 9,423,397 shares.
Transitional Small Business Disclosure Format: Yes No X
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PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
NEXTGEN COMMUNICATIONS CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Thousands)
September 30, December 31,
2002 2001
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(unaudited)
ASSETS
Current assets
Cash $ 14 $ 2,210
Restricted cash -- --
Accounts receivable, net of allowance
for doubtful accounts of $0 and $30 -- 639
Costs and earnings in excess of billings -- 226
Note receivable - current portion 513 353
Inventory -- 50
Other current assets 89 41
-------- --------
Total current assets 616 3,519
Restricted cash -- 167
Note receivable - long-term portion 1,766 1,049
Deferred acquisition costs and deposits 450 --
Property and equipment, net of accumulated depreciation of $22 and $73 143 470
Goodwill, net of accumulated amortization of $0 and $44 -- 3,465
Other assets -- 2
-------- --------
TOTAL ASSETS $ 2,975 $ 8,672
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 480 $ 1,851
Billings in excess of costs -- 220
Due to affiliate 265 1,370
Deferred revenue -- 63
Notes payable - current portion 27 5
Notes payable - stockholder - current portion -- 208
Other current liabilities -- 6
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Total current liabilities 772 3,723
Long-term debt - stockholder -- 133
Long-term debt - others 281 11
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Total liabilities 1,053 3,867
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Stockholders' equity
Common stock, $.001 par value, 50,000 shares
authorized 9,271 shares issued and outstanding 9 11
Additional paid-in capital 23,892 26,393
Notes receivable (125) --
Accumulated deficit (21,854) (21,599)
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Total stockholders' equity 1,922 4,805
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,975 $ 8,672
======== ========
The accompanying notes are an integral part of these financial statements.
1
NEXTGEN COMMUNICATIONS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except for share and per share amounts)
(Unaudited)
Three Months Nine Months
ended ended
September 30, September 30,
------------------------------ ------------------------------
2002 2001 2002 2001
------------ ------------ ------------ ------------
Revenue $ -- $ 2,778 $ 253 $ 2,808
Cost of revenue -- 1,958 157 1,958
------------ ------------ ------------ ------------
Gross profit -- 820 96 850
Selling, general and administrative expenses 435 1,045 1,563 1,646
------------ ------------ ------------ ------------
(435) (225) (1,467) (796)
Loss on sale of asset (6) -- (111) --
Reversal of prior accruals 115 -- 1,220 --
Interest income 35 17 103 167
------------ ------------ ------------ ------------
Income (loss) before income taxes (291) (208) (255) (629)
Income taxes -- -- -- --
------------ ------------ ------------ ------------
Net income (loss) $ (291) $ (208) $ (255) $ (629)
============ ============ ============ ============
Net income (loss) per share $ (0.03) $ (0.02) $ (0.03) $ (0.07)
============ ============ ============ ============
Weighted average number of common shares outstanding 9,271,878 10,967,175 9,592,757 9,526,352
============ ============ ============ ============
The accompanying notes are an integral part of these financial statements.
2
NEXTGEN COMMUNICATIONS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Nine Months Ended
September 30,
----------------------
2002 2001
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Net cash used in operating activities, net of effects of
business acquired $ (1,475) $ (1,168)
Cash flow from investing activities:
Payments for acquisitions, net of cash acquired -- 2,001
Divestiture of cash (197) --
Purchase of machinery and equipment (199) --
Disposal of machinery and equipment 30 --
Deferred acquisition costs and deposits (450) --
-------- --------
Net cash (used in) provided by investing activities (816) 2,001
Cash flow from financing activities:
Advances on notes receivable (50) --
Payments on notes receivable 173 475
Advances on capital leases and long-term debt 340 --
Payments on capital leases and long-term debt (368) (848)
Advance on line-of-credit 1,147 --
Payment on line-of-credit (1,147) --
Proceeds from stock option exercise 34
-------- --------
Net cash provided by (used in) financing activities 95 (339)
-------- --------
Net (decrease) increase in cash (2,196) 494
Cash, beginning of period 2,210 33
-------- --------
Cash, end of period $ 14 $ 527
======== ========
Supplemental disclosures of cash flow information:
Cash paid for:
Interest $ 13 $ --
Income Taxes $ -- $ --
The accompanying notes are an integral part of these financial statements.
3
NEXTGEN COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2002
(In Thousands)
NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Company Description and Nature of Operations
Nextgen Communications Corporation (together with its wholly-owned
subsidiaries, the "Company" or "Nextgen"), as announced on October 3,
2002, is currently pursuing the acquisition of residential services
companies in key markets throughout the United States that provide
services including the remediation of air contaminants, such as mold;
fire and water damage restoration; and carpet, upholstery and air duct
cleaning. The Company also announced that it would no longer seek the
acquisition of communications towers. Subsequently, the Company wrote
off the deferred acquisition costs pertaining to communications towers
during this quarter.
During the first quarter of 2002, Nextgen provided comprehensive
network development services for the communications industry. The
Company divested the subsidiary that conducted such operations in
February 2002 (see Note 4).
Since the sale of Point To Point Network Services on February 22, 2002,
the Company has had no significant operations. The Company's corporate
headquarters are based in Houston, Texas.
The accompanying unaudited interim consolidated financial statements
have been prepared by the Company in accordance with generally accepted
accounting principles and Regulation S-B, as promulgated by the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in audited financial statements prepared
in accordance with generally accepted accounting principles have been
condensed or omitted. Accordingly, these interim consolidated financial
statements should be read in conjunction with the Company's
consolidated financial statements and related notes as contained in the
Company's annual report on Form 10-KSB for the year ended December 31,
2001. In the opinion of management, the interim consolidated financial
statements reflect all adjustments, including normal recurring
adjustments, necessary for fair presentation of the interim periods
presented. The results of operations for the nine months ended
September 30, 2002 are not necessarily indicative of results of
operations to be expected for the full year.
NOTE 2 - NOTE RECEIVABLE
The Company holds a note receivable from Spruce McIntyre Holding
Corp.("Spruce"), resulting from the Company's sale of certain assets to
Spruce in September 2000. Principal payments were due in three
installments beginning June 15, 2001. The note was modified on April
30, 2001 in a new principal amount of $1,420, representing the
outstanding principal balance of the original note on that date. The
modified note bears an interest rate of 7.75% and matures on July 1,
2005. Payments of interest only were required through November 1, 2001,
and 44 equal monthly payments of principal and interest of $37
commenced on December 1, 2001. Outstanding principal at September 30,
2002, and December 31, 2001, was $1,229 and $1,402, respectively.
The Company also holds a note receivable from Point to Point of
Louisiana, Inc. The principal amount of such note was $1,000 on
September 30, 2002. The terms of this promissory note and the details
of the transaction in which it was received by the Company are set
forth in Note 4 below.
NOTE 3 - SHORT-TERM AND LONG-TERM DEBT
Short-Term Debt
The Company repaid its working capital loan in September 2002 in the
amount of $947. This working capital facility was not renewed.
4
NEXTGEN COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2002
(In Thousands)
Long-Term Debt
The Company is obligated on several notes secured by liens on vehicles.
The notes bear interest at the rate of 0.75% above the prime rate and
the rate of 7.5%; principal balances at September 30, 2002 are $53 and
$55, respectively.
Also, the Company is obligated to an individual on a note borrowed by
the Company for general corporate purposes. The note bears interest at
a rate of 8%, and its outstanding principal balance at September 30,
2002, was $200.
Scheduled annual maturities of long-term debt as of September 2002 are
as follows:
2002 $ 7
2003 $ 28
2004 $ 30
2005 $243
NOTE 4 - BUSINESS COMBINATIONS AND DISPOSITIONS
Letters of Intent
The Company announced on October 3, 2002, that it would no longer seek
the acquisition of communications towers. All of the Company's letters
of intent to acquire communications towers have expired.
The Company is currently negotiating the acquisition of several
residential services companies across the United States as part of its
recently announced strategy. The Company will be required to raise
additional capital in order to close such transactions, which may have
a dilutive effect on the Company's current stockholders.
Acquisition and Disposition of Point To Point Network Services, Inc.
On June 29, 2001, the Company acquired Point To Point Network Services,
Inc. ("Point To Point"), based in Methuen, Massachusetts. Point To
Point was a provider of fixed communications networking design and
build-out services, such as voice, data, and video, to the
communications industry. Consideration paid was 2,000 shares of the
Company's common stock, valued at $2,914, and cash of $678, for an
aggregate consideration of $3,592. The Company also incurred direct
costs related to the acquisition of $189, for a total purchase price of
$3,781.
On February 22, 2002, the Company sold all of the shares of Point To
Point that it owned to Point to Point of Louisiana, Inc., a Louisiana
corporation (the "Buyer"). The purchase price for the outstanding
common stock of Point to Point (the "Shares") that the Buyer acquired
from the Company was $1,000, which the Buyer paid by issuing a Secured
Promissory Note (the "Note") to the Company. The Note bears interest at
6.5% per annum, and requires a payment of accrued interest on February
22, 2003, and a payment of accrued interest and $100 of principal on
February 22, 2004, and all remaining principal and interest accrued
thereon on February 22, 2005. The Note is secured by the Shares,
pursuant to a Stock Pledge Agreement dated February 22, 2002. Richard
W. Lancaster, a former director of the Company, serves as the President
of the Buyer.
Settlement Agreement
A Settlement Agreement and Mutual Release of Claims (the "Release") was
entered effective as of February 20, 2002, by and among Point To Point,
the Company, and W. Michael Sullivan ("Sullivan"), a stockholder of the
Company and former employee and stockholder of Point To Point. The
Release settled certain disputes among the parties related to the
Company's acquisition of Point To Point from Sullivan on June 29, 2001,
and the termination of Sullivan's employment with Point To Point on
November 1, 2001. Pursuant to the Release, Sullivan received
approximately $464 cash, comprised of approximately $107 as severance
for the termination of his employment with Point To Point, and
approximately $357 as payment in full of a promissory note issued by
Point To Point to Sullivan on June 29, 2001. Also, approximately $42 of
liabilities of Point To Point that Sullivan had personally guaranteed
were paid off in full. The Release required Sullivan to transfer 1,800
of his
5
NEXTGEN COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2002
(In Thousands)
2,000 shares of the Company's common stock back to the Company, which
the Company returned to its authorized, but unissued, shares.
NOTE 5 - SUBSEQUENT EVENTS
On October 29, 2002, the Company purchased the building in which the
Company's headquarters are located at 11850 Jones Road Houston, Texas,
for $1,000. The Company paid $250 of the purchase price by issuing
151,515 shares of common stock of the Company, and $750 was borrowed
from an entity affiliated with a stockholder of the Company. This
mortgage loan had an origination fee of 3% plus 150,000 warrants to buy
common stock at $1.50 per share. In addition, the mortgage loan is
secured by a first lien on the property, accrues interest at a rate of
12% per annum, and requires monthly payments of interest-only for
twelve months, at which time the balance will be due.
6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
OVERVIEW
Nextgen Communications Corporation ("we," "us," "Nextgen," or the
"Company") is a Delaware corporation that was incorporated in 1998. Our growth
strategy is to acquire residential services companies in key markets and to
focus on organic growth opportunities within these markets. In addition to
residential clients, we will also perform these services for light commercial
clients such as apartment building owners, school districts and commercial
center owners.
GROWTH STRATEGY
Our growth strategy is to acquire residential services companies that
provide a wide range of services to the homeowner. The services contemplated
within this strategy include:
o Remediation of air contaminates, such as mold
o Fire damage restoration
o Water damage restoration
o Carpet cleaning
o Furniture and upholstery cleaning
o Air duct cleaning
The growth factors increasing demand for these services are:
o Greater familiarity with the potential dangers of toxic mold
o Increased homeownership rates due to lower interest rates and
lower priced homes
o Heightened maintenance awareness to increase carpet and
furniture durability and lifespan
o Regular occurrence of severe weather from hurricanes, tornados,
and floods as well as of property damage caused by fire
COMPARISON OF THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2002 RESULTS OF
OPERATIONS TO THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2001
On September 29, 2000, the Company sold certain subsidiaries that had
operated within the industrial services sector. The Company had no operations
from the date of such sale until it acquired Point To Point on June 29, 2001.
The Company divested Point To Point on February 22, 2002 and has had no
operations since that date. Therefore, comparisons between the results of
operations for the three and nine months ended September 30, 2002 to the three
and nine months ended September 30, 2001 would not be informative.
LIQUIDITY AND CAPITAL RESOURCES
The Company's existing capital resources as of September 30, 2002,
consisted of cash and notes totaling $1,985. The Company believes that the cash
currently on hand and the cash expected to be received as payments on promissory
notes owed to the Company would be sufficient throughout the next twelve months
to finance the Company's working capital needs and any remaining obligations
from the Company's divested operations. Implementation of the Company's
strategic plan of acquiring residential service companies will require
additional capital, however.
RISKS ASSOCIATED WITH FORWARD-LOOKING STATEMENT INCLUDED IN THIS FORM 10-QSB
This Form 10-QSB contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, which are intended to be
covered by the safe harbors created thereby. These statements include the plans
and objectives of management for future operations, including plans and
objectives relating to the Company's residential services acquisition strategy
and availability of capital to fund such strategy. The forward-looking
statements included herein are based on current expectations that involve
numerous risks and uncertainties. Assumptions relating to the foregoing involve
judgments with respect to, among other things, future economic, competitive and
market conditions, regulatory framework, and future business decisions, all of
which are difficult or impossible to predict accurately and many of which are
beyond the control of the Company. We refer you to the section entitled "Trends,
Risks and Uncertainties" in Item 6 of Part
7
II of our annual report on Form 10-KSB for the year ended December 31, 2001, for
a list of specific factors that could cause actual results to differ materially
from those indicated by our forward-looking statements made herein and presented
elsewhere by management. Although the Company believes that the assumptions
underlying the forward-looking statements are reasonable, any of the assumptions
could be inaccurate and, therefore, there can be no assurance that the
forward-looking statements included in this Form 10-QSB will prove to be
accurate. In light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such information
should not be regarded as a representation by the Company or any other person
that the objectives and plans of the Company will be achieved. Furthermore, we
do not undertake any obligation to update forward-looking statements made
herein.
ITEM 3. CONTROLS AND PROCEDURES.
Within the 90-day period prior to the filing of this report, an
evaluation was carried out under the supervision and with the participation of
the Company's management, including our Chief Executive Officer and our Chief
Financial Officer, of the effectiveness of the design and operation of our
disclosure controls and procedures (as defined in Rule 13a-14(c) and 15d-14(c)
under the Securities Exchange Act of 1934). Based upon that evaluation, the
Chief Executive Officer and the Chief Financial Officer concluded that the
design and operation of these disclosure controls and procedures were effective.
No significant changes were made in our internal controls or in other factors
that could significantly affect these controls subsequent to the date of their
evaluation.
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The nature and scope of our business operations bring us into regular
contact with the general public, a variety of businesses and government
agencies. These activities inherently subject us to potential litigation, which
we defend in the normal course of business. At September 30, 2002, there were
various claims and disputes incidental to the business. The Company believes
that the disposition of all such claims and disputes, individually or in the
aggregate, should not have a material adverse affect upon our financial
position, results of operations or cash flows. As of September 30, 2002, the
Company has not been named as a responsible party for any environmental issues
under the Federal Superfund Law.
During the 2nd quarter, the Company re-evaluated its accruals for legal
proceedings and, given current settlement proposals in negotiation on specific
claims, decided to lower its accrual for these legal proceedings by $1,105 which
is shown in the second quarter's income statement.
ITEM 5. OTHER INFORMATION
In connection with the Company adopting its new strategy of acquiring
businesses in the residential services sector, the Company is currently seeking
the written consent of the holders of a majority of the Company's outstanding
common stock to amend the Company's certificate of incorporation in order to
change the name of the Company to "Home Solutions of America, Inc." The
Company's stockholders will be notified by the Company's Schedule 14C if the
Company successfully obtains the requisite number of consents.
In addition, on September 2, 2002, the Company amended the stock option
agreement of R. Andrew White, the Company's Chief Financial Officer, to vest Mr.
White's stock options in one-third increments, with one-third of the options
vesting immediately, one-third vesting on February 1, 2003, and the remaining
one-third vesting on February 1, 2004, respectively, in lieu of the prior
vesting schedule, which was based on the number of wireless towers acquired by
the Company.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
2.1 Stock Purchase and Note Assignment Agreement, dated as of September
29, 2000, between Spruce MacIntyre Holding Corp., P.W. Stephens
Environmental, Inc., P.W. Stephens Contractors, Inc., P.W. Stephens
Services, Inc., P.W. Stephens Northwest, Inc. and U.S. Industrial
Services, Inc. (filed as Exhibit 2.1 to the Company's Current Report
on Form 8-K filed on February 20, 2001, and incorporated herein by
reference).
2.2 Reorganization Agreement and Plan of Merger, effective as of June 29,
2001, by and among U S Industrial Services, Inc., a Delaware
corporation, Point To Point Network Services, Inc., a Massachusetts
corporation, and W. Michael Sullivan (filed as Exhibit 2.1 to the
Company's Current Report on Form 8-K filed on July 19, 2001, and
incorporated herein by reference).
2.3 Agreement for Sale of Shares, dated as of February 22, 2002, between
Nextgen Communications Corporation, a Delaware corporation, and Point
to Point of Louisiana, Inc., a Louisiana corporation (filed as Exhibit
2.1 to the Company's Current Report on Form 8-K filed on March 19,
2002, and incorporated herein by reference).
2.4 First Amendment to Agreement for Sale of Shares, executed to be
effective as of February 22, 2002, by and between Nextgen
Communications Corporation and Point to Point of Louisiana, Inc.
(filed as Exhibit 2.2 to the Company's Current
8
Report on Form 8-K filed on March 19, 2002, and incorporated herein by
reference).
2.5 Secured Promissory Note, dated February 22, 2002, issued by Point to
Point of Louisiana to Nextgen Communications Corporation. (filed as
Exhibit 2.3 to the Company's Current Report on Form 8-K filed on March
19, 2002, and incorporated herein by reference).
2.6 First Amendment to Secured Promissory Note, executed to be effective
as of February 22, 2002, by and between Point to Point of Louisiana,
Inc. and Nextgen Communications Corporation (filed as Exhibit 2.4 to
the Company's Current Report on Form 8-K filed on March 19, 2002, and
incorporated herein by reference).
2.7 Stock Pledge Agreement, executed to be effective as of February 22,
2002, by and between Point to Point of Louisiana, Inc. and Nextgen
Communications Corporation (filed as Exhibit 2.5 to the Company's
Current Report on Form 8-K filed on March 19, 2002, and incorporated
herein by reference).
2.8 Settlement Agreement and Mutual Release of Claims, executed to be
effective as of February 20, 2002, by and among Point To Point Network
Services, Inc., Nextgen Communications Corporation, and W. Michael
Sullivan (filed as Exhibit 2.6 to the Company's Current Report on Form
8-K filed on March 19, 2002, and incorporated herein by reference).
2.9 Repurchase Option Agreement, executed to be effective as of February
20, 2002, by and between Nextgen Communications Corporation and W.
Michael Sullivan (filed as Exhibit 2.7 to the Company's Current Report
on Form 8-K filed on March 19, 2002, and incorporated herein by
reference).
3.1 Certificate of Incorporation of the Company, as restated on July 31,
2001 (filed as Exhibit A to the Company's Information Statement on
Schedule 14C filed on July 9, 2001, and incorporated herein by
reference).
3.2 Bylaws of the Company, as amended on April 2, 2001 (filed as Exhibit
3.2 to the Company's Quarterly Report on Form 10-QSB for the quarter
ended June 30, 2001, and incorporated herein by reference).
10.1* 1998 Stock Option Plan (filed as Exhibit 4.1 to the Company's Annual
Report on Form 10-KSB for the year ended September 30, 1998, and
incorporated herein by reference).
10.2 Promissory Notes in principal amounts of $3,490,000 and $1,000,000,
respectively, issued to ATNAM Enterprises, Inc. by Kenny Industrial
Services, L.L.C. (filed as Exhibit 10.3 to the Company's Quarterly
Report on Form 10-QSB for the quarter ended March 31, 2001, and
incorporated herein by reference).
10.3* 2001 Stock Plan (filed as Exhibit B to the Company's Information
Statement on Schedule 14C filed on July 9, 2001, and incorporated
herein by reference).
10.4 Note Modification Agreement dated April 30, 2001, by and between
Spruce MacIntyre Holding Corp. and U S Industrial Services, Inc.
(filed as Exhibit 10.6 to the Company's Quarterly Report on Form
10-QSB for the quarter ended June 30, 2001, and incorporated herein by
reference).
10.5* Employment Agreement by and between Frank J. Fradella and U S
Industrial Services, Inc., dated April 2, 2001. (filed as Exhibit 10.7
to the Company's Quarterly Report on Form 10-QSB for the quarter ended
June 30, 2001, and incorporated herein by reference).
10.6* Registration Rights Agreement by and between Frank J. Fradella and U
S Industrial Services, Inc., dated April 2, 2001. (filed as Exhibit
10.8 to the Company's Quarterly Report on Form 10-QSB for the quarter
ended June 30, 2001, and incorporated herein by reference).
10.7* Stock Option Agreement executed December 27, 2001, to be effective
as of October 3, 2000, by and between Frank J. Fradella and Nextgen
Communications Corporation (filed as Exhibit 2 to Amendment No. 3 to
Schedule 13D of Frank J. Fradella filed on January 3, 2002, and
incorporated herein by reference).
10.8* Stock Option Agreement by and between R. Andrew White and Nextgen
Communications Corporation, dated February 1, 2002 (filed as Exhibit
9
10.8 to the Company's Quarterly Report on Form 10-QSB for the quarter
ended March 31, 2002, and incorporated herein by reference).
10.9* Employment Agreement by and between R. Andrew White and Nextgen
Communications Corporation, dated March 1, 2002 (filed as Exhibit 10.9
to the Company's Quarterly Report on Form 10-QSB for the quarter ended
March 31, 2002, and incorporated herein by reference).
10.10* First Amendment to Stock Option Agreement by and between R. Andrew
White and Nextgen Communications Corporation, dated September 2,
2002.+
* Denotes a management contract or compensatory plan or arrangement.
+ Filed herewith.
(b) Reports on Form 8-K
None.
10
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.
NEXTGEN COMMUNICATIONS CORPORATION
Dated: November 13, 2002 By: /s/ FRANK J. FRADELLA
----------------------------------------
Frank J. Fradella
President and Chief Executive Officer
Dated: November 13, 2002 By: /s/ R. ANDREW WHITE
----------------------------------------
R. Andrew White
Chief Financial Officer
11
CERTIFICATIONS
I, Frank J. Fradella, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Nextgen
Communications Corporation;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;
b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
a) All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) Any fraud, whether or not material, that involves management of
other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
/s/ FRANK J. FRADELLA
---------------------
Frank J. Fradella
Chief Executive Officer
Date: November 13, 2002
12
I, R. Andrew White, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Nextgen
Communications Corporation;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;
b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
a) All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) Any fraud, whether or not material, that involves management of
other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
/s/ R. ANDREW WHITE
------------------------
R. Andrew White
Chief Financial Officer
Date: November 13, 2002
13
CERTIFICATION OF
CHIEF EXECUTIVE OFFICER
OF NEXTGEN COMMUNICATIONS CORPORATION
PURSUANT TO 18 U.S.C. SECTION 1350
I, Frank J. Fradella, Chief Executive Officer of NEXTGEN COMMUNICATIONS
CORPORATION (the "Company"), hereby certify that the accompanying report on Form
10-QSB for the quarterly period ending September 30, 2002 and filed with the
Securities and Exchange Commission on the date hereof pursuant to Section 13(a)
of the Securities Exchange Act of 1934 (the "Report") by the Company fully
complies with the requirements of that section.
I further certify that the information contained in the Report fairly
presents, in all material respects, the financial operations and results of
operations of the Company.
/s/ FRANK J. FRADELLA
------------------------------
Frank J. Fradella
Chief Executive Officer
Date: November 13, 2002
CERTIFICATION OF
CHIEF FINANCIAL OFFICER
OF NEXTGEN COMMUNICATIONS CORPORATION
PURSUANT TO 18 U.S.C. SECTION 1350
I, R. Andrew White, Chief Financial Officer of NEXTGEN COMMUNICATIONS
CORPORATION (the "Company"), hereby certify that the accompanying report on Form
10-QSB for the quarterly period ending September 30, 2002 and filed with the
Securities and Exchange Commission on the date hereof pursuant to Section 13(a)
of the Securities Exchange Act of 1934 (the "Report") by the Company fully
complies with the requirements of that section.
I further certify that the information contained in the Report fairly
presents, in all material respects, the financial operations and results of
operations of the Company.
/s/ R. ANDREW WHITE
------------------------------
R. Andrew White
Chief Financial Officer
Date: November 13, 2002
14
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------- -----------
10.10 First Amendment to Stock Option Agreement by and between R. Andrew
White and Nextgen Communications Corporation, dated September 2,
2002.