UNITED
STATES OF AMERICA
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON, DC
20549
FORM
10-Q
(Mark
One)
|
x
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QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934
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FOR
THE QUARTERLY PERIOD ENDED: June 30, 2010
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¨
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934
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For
the transition period
from to
Commission
File Number: 000-28459
Millennium
Prime, Inc.
(Exact
name of Registrant as specified in its charter)
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Delaware
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22-3360133
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(State or Other Jurisdiction of
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(I.R.S. Employer
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Incorporation or Organization)
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Identification No.)
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6538
Collins Ave, Suite 262, Miami Beach, FL 33041
(Address
of principal executive offices) (Zip Code)
786-347-9309
(Registrant's
telephone number)
400
Garden City Plaza, Garden City, NY 11530
(Former
Name, Former Address and Former Fiscal Year, if changed since last
report)
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
x
No
¨
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of "large accelerated filer," "accelerated filer," and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
|
Large
accelerated filer
¨
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Accelerated
filer
¨
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Non-accelerated
filer
¨
(Do
not check if a smaller
reporting
company)
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Smaller
reporting
company
x
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes
¨
No
x
The
number of the registrant's shares of common stock outstanding
was 229,937,784 as of August 20,
2010.
MILLENNIUM
PRIME, INC.
FORM
10-Q
TABLE OF
CONTENTS
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PAGE
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PART
I. FINANCIAL INFORMATION
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Item
1.
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Consolidated
Financial Statements
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Consolidated
Balance Sheets as of June 30, 2010 (unaudited) and September
30, 2009 (audited)
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3
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Consolidated
Statements of Operations for the three and nine months ended June 30, 2010
and 2009 (unaudited)
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4
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Consolidated
Statements of Cash Flows for the nine months ended June 30, 2010 and 2009
(unaudited)
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5
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Notes
to the Unaudited Consolidated Financial Statements
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6
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Item
2.
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Management's
Discussion and Analysis or Plan of Operation
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12
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Item
3.
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Management's
Quantitative and Qualitative Disclosures About Market Risk
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Item
4T.
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Controls
and Procedures
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16
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PART
II. OTHER INFORMATION
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Item 1A.
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Risk
Factors
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17
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Item
6.
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Exhibits
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18
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Signatures
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19
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FORWARD-LOOKING
STATEMENTS
Certain
statements made in this Quarterly Report on Form 10-Q are "forward-looking
statements" regarding the plans and objectives of management for future
operations and market trends and expectations. Such statements involve known and
unknown risks, uncertainties and other factors that may cause our actual
results, performance or achievements to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. The forward-looking statements included herein are
based on current expectations that involve numerous risks and uncertainties. Our
plans and objectives are based, in part, on assumptions involving the continued
expansion of our business. Assumptions relating to the foregoing involve
judgments with respect to, among other things, future economic, competitive and
market conditions and future business decisions, all of which are difficult or
impossible to predict accurately and many of which are beyond our control.
Although we believe that our assumptions underlying the forward-looking
statements are reasonable, any of the assumptions could prove inaccurate and,
therefore, there can be no assurance that the forward-looking statements
included in this report will prove to be accurate. In light of the significant
statements included herein, the inclusion of such information should not be
regarded as a representation by us or any other person that our objectives and
plans will be achieved. We undertake no obligation to revise or update publicly
any forward-looking statements for any reason. The terms "we", "our", "us", or
any derivative thereof, as used herein refer to Millennium Prime, Inc., a
Delaware corporation, and its predecessors.
PART I -
FINANCIAL INFORMATION
ITEM
1. FINANCIAL STATEMENTS
MILLENNIUM
PRIME, INC. and Subsidiaries
CONSOLIDATED
BALANCE SHEETS
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June 30, 2010
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September 30, 2009
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(Unaudited)
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(Audited)
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CURRENT
ASSETS
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CURRENT
ASSETS
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Cash
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$
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399
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$
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416,622
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Notes
receivable and accrued interest receivable, net of
allowance
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0
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0
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TOTAL
ASSETS (all current)
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$
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399
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$
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416,622
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LIABILITIES
AND STOCKHOLDERS' EQUITY
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CURRENT
LIABILITIES
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Accounts
payable and accrued expense
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$
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755,310
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770,950
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Interest
payable on convertible debentures
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22,941
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1,333,108
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8%
Convertible debenture - in default
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0
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2,066,250
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8%
Convertible debenture - newly issued
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280,000
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775,000
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Convertible
Note - Quest Capital Markets
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425,590
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0
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Other
liabilities
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231,149
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0
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Advances
and note payable, shareholders
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0
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389,335
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Line
of credit payable
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150,000
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150,000
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Total
current liabilities
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1,864,990
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5,484,643
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COMMITMENTS
and CONTINGENCIES
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STOCKHOLDERS'
EQUITY
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Preferred
stock, par value $1.00, 10,000,000 shares authorized, 1,000,000 and 0,
shares issued, respectively
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1,000,000
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0
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Common
stock - par value $.0001, per share; authorized, 1,000,000,000 shares;
229,937,784 and 51,284 shares issued and outstanding,
respectively
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22,993
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5
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Additional
paid in capital
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51,424,189
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15,595,045
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Accumulated
deficit
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(54,311,773
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)
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(20,663,071
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)
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(1,,591
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)
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(5,068,021
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)
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$
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399
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$
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416,622
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The
accompanying notes are an integral part of this statement.
MILLENNIUM
PRIME, INC. and Subsidiaries
CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited)
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Three months ended
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Three months ended
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Nine months ended
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Nine months ended
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June 30, 2010
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June 30, 2009
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June 30, 2010
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June 30, 2009
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Net
sales
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$
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0
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$
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0
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$
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0
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$
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0
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Cost
of sales
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0
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0
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0
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0
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Gross
profit
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0
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0
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0
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0
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General
and administrative expenses
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32,193,369
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88,451
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33,227,640
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148,395
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Loss
from operations
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(32,193,369
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)
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(88,451
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)
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(33,227,640
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)
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(148,395
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)
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Other
income and (expense)
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Interest
income
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8,569
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2,666
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22,433
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2,666
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Valuation
allowance
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(48,411
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)
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(203,842
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)
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(115,275
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)
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(203,842
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)
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Interest
and penalties expense
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(201,457
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)
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(78,086
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)
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(328,220
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)
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(218,179
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)
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Loss
before provision for income taxes
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(32,434,668
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)
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(367,713
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)
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(33,648,702
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)
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(567,750
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)
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Provision
for income taxes
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0
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0
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0
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0
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NET
LOSS
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$
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(32,434,668
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)
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$
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(367,713
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)
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$
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(33,648,702
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)
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$
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(567,750
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)
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Basic
and diluted earnings (loss) per share
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(0.189
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)
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$
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(9.59
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)
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$
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0.510
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)
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$
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(18.11
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)
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Weighted-average
shares outstanding-basic and diluted
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171,188,784
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38,355
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65,942,369
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31,345
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|
The
accompanying notes are an integral part of this statement.
MILLENNIUM
PRIME, INC. and Subsidiaries
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
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Nine months ended
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Nine months ended
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June 30, 2010
|
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June 30, 2009
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Cash
flows from operating activities
|
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Net
(loss)
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$
|
(33,648,702
|
)
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$
|
(567,750
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)
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Valuation
allowance
|
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115,275
|
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Inducement
expense related to conversion of debt to equity
|
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108,534
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Amortization
of beneficial conversion of debt
|
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62,062
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Shares
issued for services
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32,680,000
|
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Changes
in assets and liabilities
|
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|
|
|
|
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|
|
Accounts
payable and accrued expense
|
|
|
171,883
|
|
|
|
287,370
|
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|
Net
cash used in operating activities
|
|
|
(510,948
|
)
|
|
|
(280,380
|
)
|
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|
|
|
|
|
|
|
|
|
Cash
flows from investing activities
|
|
|
|
|
|
|
|
|
|
Increase
in notes receivable
|
|
|
(115,275
|
)
|
|
|
|
|
|
Purchase
of furniture and equipment
|
|
|
|
|
|
|
|
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Net
cash used in investing activities
|
|
|
(115,275
|
)
|
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|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
flows from financing activities
|
|
|
|
|
|
|
|
|
|
Advances
from shareholders
|
|
|
|
|
|
|
47,600
|
|
|
Issuance
of convertible debentures
|
|
|
210,000
|
|
|
|
775,000
|
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|
Increase
(decrease) in convertible debentures
|
|
|
|
|
|
|
|
|
|
Net
cash provided by financing activities
|
|
|
210,000
|
|
|
|
822,600
|
|
|
|
|
|
|
|
|
|
|
|
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NET
INCREASE (DECREASE) IN CASH
|
|
|
(416,223
|
)
|
|
|
542,220
|
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|
Cash
at beginning of period
|
|
|
416,622
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
at end of period
|
|
$
|
399
|
|
|
$
|
542,220
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosures of cash flow information:
|
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|
|
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|
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Cash
paid during the period for
|
|
|
|
|
|
|
|
|
|
Interest
|
|
|
0
|
|
|
|
0
|
|
|
Taxes
|
|
|
0
|
|
|
|
0
|
|
|
Noncash
investing and financing transactions:
|
|
|
|
|
|
|
|
|
|
Equity
issued for services
|
|
$
|
32,680,000
|
|
|
|
0
|
|
|
Debt
converted to equity
|
|
$
|
3,773,629
|
|
|
|
333,750
|
|
The
accompanying notes are an integral part of this statement.
MILLENNIUM
PRIME, INC. AND SUBSIDIARIES
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 -
BASIS OF PRESENTATION
The
accompanying unaudited condensed consolidated financial statements of Millennium
Prime, Inc. (the "Company") included herein have been prepared in accordance
with generally accepted accounting principles for interim period reporting in
conjunction with the instructions to Form 10-Q. Accordingly, these statements do
not include all of the information required by generally accepted accounting
principles for annual financial statements, and are subject to year-end
adjustments. In the opinion of management, all known adjustments (consisting of
normal recurring accruals and reserves) necessary to present fairly the
financial position, results of operations and cash flows for the three and nine
month period ended June 30, 2010 have been included. The interim statements
should be read in conjunction with the financial statements and related notes
included in the Company's annual report on Form 10-K for the year ended
September 30, 2009.
The
financial statements set forth herein represent the operations of Millennium
Prime, Inc. and its subsidiaries for the three and nine month period ending June
30, 2010. The operating results for the three and nine months ended June 30,
2010 are not necessarily indicative of the results to be expected for the full
year.
NOTE 2 -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Primarily
due to the lack of financing, Millennium Prime, Inc. (formerly known as Genio
Group, Inc. and subsidiaries) referred to herein as "Millennium" or the
"Company" has closed all operations and terminated all of its
employees except for its officers.
We are a
developmental corporation that is developing innovative lifestyle brands for the
Generation-Y demographic. Our focus is on marketing products for the beverage,
apparel and general merchandise categories where we can achieve a clear and
authentic market position. We target consumers who live a lifestyle filled
with high style, artistic edge and a demand for the best and participate in
current trends through premium products that embody the values and aspirations
of the millennial generation & beyond. In addition to organic growth,
we will grow via acquisition of new brands, or partnership with existing brands,
to bolster our beverage, apparel and lifestyle merchandise business lines
serving our Millennial trendsetter focused strategies.
One of
our product companies, EntMark Partners, assist the entertainment industry in
marketing specific projects and events. EntMark Partners mission is to empower
small and large artists and companies with the ability to optimize the revenue
they make from individual events through interaction via cell phone messaging.
By utilizing their Cell Phone Text Based Contest Program, we can enable artists
and event organizers to reach their fan base daily on a broader and yet more
focused basis.
MILLENNIUM
PRIME, INC. AND SUBSIDIARIES
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
GOING
CONCERN
The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern. The Company had a net working
capital deficiency of $1,864,591 and a stockholders' deficiency of $1.9 million
at June 30, 2010 and negative cash flow from operations for the nine months
ended June 30, 2010. The Company is in default under its line of credit. These
conditions raise substantial doubt about the Company's ability to continue as a
going concern.
Management
expects to incur additional losses in the foreseeable future and recognizes the
need to raise capital to remain viable. The accompanying consolidated financial
statements do not include any adjustments that might be necessary should the
Company be unable to continue as a going concern.
STOCK
OPTIONS AND WARRANTS
The
Company adopted the accounting guidance for Share-Based Payments. Under this
application, the Company is required to record compensation expense using a
fair-value-based measurement method for all awards granted after the date of
adoption and for the unvested portion of previously granted awards that remain
outstanding at the date of adoption. Per the provisions of this accounting
guidance, the Company has adopted the policy to recognize compensation expense
on a straight-line attribution method.
The
Company had no issuances of stock options or warrants in the past two years, nor
have any such prior issued options or warrants vest in the past two
years.
FAIR
VALUE OF FINANCIAL INSTRUMENTS
The fair
value measurement provision defines fair value, establishes a framework for
measuring fair value under generally accepted accounting principles, and expands
disclosures about fair value measurements. This statement applies under
other accounting pronouncements that require or permit fair value measurements,
the FASB having previously concluded in those accounting pronouncements that
fair value is a relevant measurement attribute.
Valuation
techniques for fair value are based upon observable and unobservable inputs.
Observable inputs reflect market data obtained from independent sources, while
unobservable inputs reflect our best estimate, considering all relevant
information. These valuation techniques involve some level of management
estimation and judgment. The valuation process to determine fair value also
includes making appropriate adjustments to the valuation model outputs to
consider risk factors.
The fair
value hierarchy of our inputs used in the determination of fair value for assets
and liabilities during the current period consists of three levels. Level
1 inputs are comprised of unadjusted, quoted prices in active markets for
identical assets or liabilities at the measurement date. Level 2 inputs
include quoted prices for similar instruments in active markets; quoted prices
for identical or similar instruments in markets that are not active; inputs
other than quoted prices that are observable for the asset or liability; and
inputs that are derived principally from or corroborated by observable market
data by correlation or other means. Level 3 inputs incorporate our own
best estimate of what market participants would use in pricing the asset or
liability at the measurement date where consideration is given to the risk
inherent in the valuation technique and the risk inherent in the inputs to the
model. If inputs used to measure an asset or liability fall within
different levels of the hierarchy, the categorization is based on the lowest
level input that is significant to the fair value measurement of the asset or
liability. Our assessment of the significance of a particular input to the
fair value measurement in its entirety requires judgment, and considers factors
specific to the asset or liability.
We are
unable to determine the fair value of the legacy accounts payables, debentures
in default and the line of credit payable. We have significant legacy accounts
payable balances that are at least four years old and that we believe will never
require a financial payment for a variety of reasons. Management is currently
assessing the fair value of these payables.
The
carrying value of our cash and cash equivalents, accounts payable and other
current liabilities approximate fair value because of their short-term maturity.
All of our other significant financial assets, financial liabilities and equity
instruments are either recognized or disclosed in the financial statements
together with other information relevant for making a reasonable assessment of
future cash flows, interest rate risk and credit risk. Where practicable the
fair values of financial assets and financial liabilities have been determined
and disclosed; otherwise only available information pertinent to fair value has
been disclosed.
USE OF
ESTIMATES
The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
which affect the reporting of assets and liabilities as of the dates of the
financial statements and revenues and expenses during the reporting period.
These estimates primarily relate to the deferred tax asset and debt valuations.
Actual results could differ from these estimates.
MILLENNIUM
PRIME, INC. AND SUBSIDIARIES
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
REVERSE
STOCK SPLIT
The
Company effectuated a 2000 for 1 reverse stock split on December 30, 2009. All
per share and share data have been retroactively presented as if this reverse
stock split occurred at the beginning of the periods presented.
NEW
ACCOUNTING PRONOUNCEMENTS
Revenue
Recognition – Multiple Deliverable Revenue Arrangements
In
October 2009, the FASB issued guidance for Revenue Recognition – Multiple
Deliverable Revenue Arrangements ( Subtopic 605-25 ) “Subtopic”. This accounting
standards update establishes the accounting and reporting guidance for
arrangements under which the vendor will perform multiple revenue – generating
activities. Vendors often provide multiple products or services to their
customers. Those deliverables often are provided at different points in time or
over different time periods. Specifically, this Subtopic addresses how to
separate deliverables and how to measure and allocate arrangement consideration
to one or more units of accounting. The amendments in this guidance will
affect the accounting and reporting for all vendors that enter into
multiple-deliverable arrangements with their customers when those arrangements
are within the scope of this Subtopic.
This
Statement is effective for fiscal years, and interim periods within those fiscal
years, beginning on or after June 15, 2010. Earlier adoption is permitted. If a
vendor elects early adoption and the period of adoption is not the beginning of
the entity’s fiscal year, the entity will apply the amendments under this
Subtopic retrospectively from the beginning of the entity’s fiscal year.
The presentation and disclosure requirements shall be applied retrospectively
for all periods presented. Management believes this Statement will have no
impact on the financial statements of the Company once adopted.
All other
issued accounting pronouncement but not yet effective have been reviewed and are
not deemed to have a material financial impact on the Company once
adopted.
MILLENNIUM
PRIME, INC. AND SUBSIDIARIES
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 3 –
NOTES RECEIVABLE
The
Company made a number of short term loans to Bong Spirit Imports, LLC.
Approximately $301,000 of the loans have an interest rate of 10% per annum and
matured on July 31, 2010. These loans are secured by a security agreement
in the equipment, fixtures, inventory and accounts receivable of Bong Spirit
Imports, LLC. Due to uncertainty concerning the priority of the security
interest, the Company has fully reserved these notes as of June 30,
2010.
On April
15, 2010, we entered into a Securities Exchange Agreement with the principal
shareholders/members of Bong Spirit Imports, LLC (“Bong”) a Florida Limited
Liability Corporation pursuant to which the Company will acquire 100% of the
outstanding shares/membership interests in exchange for an aggregate of
60,000,000 shares of the Company’s common stock.
The
Company is negotiating the resolution to the matured notes and the closing of
the pending merger with Bong. Bong is an importer and distributor of alcohol
products including Bong Vodka, Bong’s offices are located in Orlando,
Florida.
NOTE 4 -
CONVERTIBLE DEBENTURES
During
the year ended September 30, 2009, certain debenture holders converted $333,750
of such debentures for 22,250 shares of common stock, which was the fair value
of such shares issued.
During
the period ended December 30, 2009, certain debenture holders converted
$1,760,000 of such debentures together with accrued interest penalties and
advances for 500,000 shares of common stock, which was the fair value of such
shares issue. The remaining debentures were acquired by the Company’s former
sole officer and director and assigned to Quest Capital Markets, Inc on December
23, 2009.
MILLENNIUM
PRIME, INC. AND SUBSIDIARIES
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 5 –
OTHER DEBT LINE OF CREDIT
On May 4,
2004 the Company entered into a loan and security agreement with IIG Capital,
LLC, as agent for IIG Trade Opportunities Fund N.V., as lender. The negotiated
outstanding balance under the line of credit at June 30, 2010 was
$150,000.
The
Company is in default under this agreement. In December 2005, the Company agreed
to settled its debt to IIG by the immediate payment of $50,000 in cash, the
issuance of a $25,000 note due on June 30, 2006 and the conversion of
approximately $125,000 of past due fees and interest into a convertible
debenture on terms similar to those of the Company's other convertible
debentures. As of June 30, 2010, the note and the debentures have not been
issued.
NOTE 6 –
CONVERTIBLE DEBENTURES – NEWLY ISSUED
The
Company issued $985,000.00 of Series A 8% convertible debentures. The
Series A debentures are due and payable on the earlier of (a) nine months from
the date of issuance or (b) when such amounts are declared due and payable
by the holder or automatically due and payable upon or after an event of default
(as defined in the debenture).
The holder has the right
until August 31, 2010 to convert any outstanding and unpaid principal and/or
accrued interest due under the debentures into fully paid and nonassessable
shares of the Company’s Common Stock at seventy-five percent (75%) of the
five-day average closing bid price of the Company’s Common Stock for the five
(5) trading days immediately prior to the date of the Conversion Notice, but in
no event shall the conversion price be less than $.04 or greater than $.08 per
share. After August 31, 2010 and expiring on the Maturity Date the holder shall
have the right to convert any outstanding and unpaid principal and/or accrued
interest due under the debentures into fully paid and nonassessable shares of
the Company’s Common Stock at a fixed conversion price of $.20 per share (“Fixed
Conversion Price”)” Thru June 30, 2010 the Company has received conversion
notices from holders of an aggregate principal amount of $705,000 of the
debentures. Inclusive of accrued interest of $58,820, the Company is
obligated to issue the holders an aggregate of 19,005,750 shares. The Company
recorded additional interest expense of $108,534 related to this conversion at
June 30,02010.
NOTE 7 –
CONVERTIBLE NOTE _ QUEST CAPITAL MARKETS, INC
On
December 23, 2009, the Company’s former sole officer and director assigned
certain convertible debentures and other liabilities of the Company owed to him
to Quest Capital Markets, Inc (Quest). On March 24, 2010, the Company and
Quest entered into an agreement whereby these liabilities were restructured.
These amounts accrue interest at a rate of 8% per annum and are convertible into
shares of Company common stock at the rate of $0.001
NOTE 8 –
EQUITY TRANSACTIONS
During
December 2009, convertible debenture holders converted principal plus accrued
interest, advances and penalties in the amount of $3,046,629, for 500,000 shares
of common stock.
On
October 29, 2009, the Company filed an amendment to its Certificate of
Incorporation to (i) change its name to Millennium Prime, Inc.; (ii) effect a
reverse split of all of the outstanding shares of its Common Stock at a ratio
of one-for-two thousand (1 for 2000); increase our authorized Common Stock
from Two Hundred Million (200,000,000) shares, par value $.0001 to Two Hundred
Fifty Million (250,000,000) shares, par value $.0001; and (iv) authorize Ten
Million (10,000,000) shares of Preferred Stock, par value $1.00 per share, with
such designation rights and preferences as may be determined from time to time
by our Board of Directors. Concurrently, with the foregoing, the Board of
Directors approved the creation of One Million (1,000,000) shares of Series A
Preferred Stock with the rights and preferences defined in the amendment to our
Certificate of Incorporation including the right of each issued and outstanding
share of Series A Preferred Stock to have the number of votes equal to the
result of: (a) the number of shares of our Common Stock issued and outstanding
at the time of such vote multiplied by 2.33334; and divided by (b) the total
number of Series A Preferred shares issued and outstanding at the time of the
vote.
As a
result of the 1 for 2000 reverse stock split the number of issued and
outstanding shares of our Common Stock was decreased from 99,981,787 to 51,284,
after issuing one (1) share of our Common Stock to stockholders who would be
entitled to a fractional share as a result of the reverse stock
split.
On
December 30, 2009, the Company executed a Restated and Amended Asset Purchase
Agreement (“Amended Agreement”), that amended the original Asset Purchase
Agreement dated June 21, 2009 by and among the Company, Millennium Prime Nevada
and the shareholders of Millennium Prime Nevada. The Amended Agreement provided
for an increase in the number of common shares issuable to the Millennium Prime
shareholders. As a result of the Amended Agreement the Company acquires
certain assets from Millennium Prime in exchange for: (i) an aggregate of One
Million (1,000,000) restricted shares of the Company’s Series A Preferred Stock,
$1.00 par value per share (the “Series A Preferred Stock”); and (ii) an
aggregate of Twenty-Seven Million (27,000,000) restricted shares of the
Company’s common stock $0.0001 par value per share. This transaction, together
with the 2000 for 1 reverse stock split discussed above and the conversion
of convertible debt discussed below have been accounted for as a
recapitalization of the Company at December 30, 2009.
MILLENNIUM
PRIME, INC. AND SUBSIDIARIES
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The
Company completed the acquisition on December 30, 2009, at which time each of
the current officers and directors of the Company resigned and John F. Marchese
the President of Millennium Prime Nevada was elected to the Company’s board of
directors and was appointed the Company’s President and Chief Executive
Officer.
On
December 30, 2009, the Company issued an aggregate of 500,000 shares of its
Common Stock to Steven A. Horowitz, the Company’s former sole officer and
director, and his designees and assigns. The shares were issued in
consideration of Mr. Horowitz’ efforts in settling some of the Company’s
indebtedness and for his General Release, releasing the Company from any and all
past, present and future obligations.
On April
9, 2010, the Company issued an aggregate of 160,000,000 shares of its Common
Stock to John F. Marchese (75,000,000), the Company’s CEO and Chairman of
the Board, and JPA Capital, LLC (85,000,000), a principal shareholder of
the Company to adjust the original purchase price of Millennium Prime, Inc. -
Nevada. The adjustment was made as a direct result of the Company being delisted
from the OTC-Bulletin Board due to the Company’s delinquent SEC filing status
caused by former management. The price of our common stock on April 9, 2010 was
$0.20 per share. We recorded a fair value compensation charge for these shares
when issued.
On April
9, 2010, the Company issued 22,000,000 shares of its Common Stock to Quest
Capital Markets, Inc. and its assignees upon the conversion of an aggregate of
$22,000.00 of outstanding indebtedness. The original debt was incurred by
the Company in 2004. The certificates evidencing the above mentioned
shares were issued without legend in that Rule 144 permits the Quest to tack
back to the date of the debt which was more than one year prior to
issuance.
On May
11, 2010, the Company filed Schedule 14C with the Securities and Exchange
Commission providing notice that certain stockholders of the Company have
consented to taking of corporate actions by consent in lieu of a meeting of
stockholders. The corporate actions will be effective 20 days after the
mailing of this information statement to amend our Certificate of Incorporation
to increase the number of shares of Common Stock the Company is authorized to
issue to 1,000,000,000.
On April
9, 2010, the Company issued 875,000 shares of its Common Stock to Private
Research Holdings LLC. The shares were issued as compensation for services
rendered to the Company by each recipient
Thru June
30, 2010 the Company has received conversion notices from holders of an
aggregate principal amount of $705,000 of the debentures. Inclusive of
accrued interest of $58,820, the Company is obligated to issue the holders an
aggregate of 19,005,750 shares
NOTE 9 –
SUBSEQUENT EVENTS
On July
16, 2010, the Company and the principal shareholders/members of Bong entered
into an Amendment to the Securities Exchange Agreement whereby the Company
agreed to increase the number of shares issuable to the Bong
shareholders/members upon closing from 30,000,000 to 60,000,000. The
closing of this transaction is subject to a number of conditions including but
limited to the Company providing Bong with $400,000 of capital at the
Closing. The Company anticipates that the closing will occur no later than
August 31, 2010. The Company has been a marketing partner and financial
investor in Bong since 2009, to date the Company has loaned Bong approximately
$341,000.
The
Company issued $985,000.00 of Series A 8% convertible debentures. The
Series A debentures are due and payable on the earlier of (a) nine months from
the date of issuance or (b) when such amounts are declared due and payable
by the holder or automatically due and payable upon or after an event of default
(as defined in the debenture).
The holder has the right
until August 31, 2010 to convert any outstanding and unpaid principal and/or
accrued interest due under the debentures into fully paid and nonassessable
shares of the Company’s Common Stock at seventy-five percent (75%) of the
five-day average closing bid price of the Company’s Common Stock for the five
(5) trading days immediately prior to the date of the Conversion Notice, but in
no event shall the conversion price be less than $.04 or greater than $.08 per
share. After August 31, 2010 and expiring on the Maturity Date the holder shall
have the right to convert any outstanding and unpaid principal and/or accrued
interest due under the debentures into fully paid and nonassessable shares of
the Company’s Common Stock at a fixed conversion price of $.20 per share (“Fixed
Conversion Price”). To date, the Company has received conversion notices
from holders of an aggregate principal amount of $765,000 of the
debentures. Inclusive of accrued interest of $60,813, the Company is
obligated to issue the holders an aggregate of 20,740,325
shares.
ITEM
2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The
following contains forward-looking statements based on current expectations,
estimates and projections about our industry, management's beliefs, and
assumptions made by management. All statements, trends, analyses and other
information contained in this report relative to trends in our financial
condition and liquidity, as well as other statements, including, but not limited
to, words such as "anticipate," "believe," "plan," "intend," "expect,"
"predict," and other similar expressions constitute those statements. These
statements are not guarantees of future performance and are subject to risks and
uncertainties that are difficult to predict. Accordingly, actual results may
differ materially from those anticipated or expressed in the
statements.
OVERVIEW
On June
21, 2009, Genio Group, Inc. entered into an agreement and plan of reorganization
with Millennium Prime, Inc., a Nevada corporation (“Millennium Prime Nevada”)
and the shareholders of Millennium Prime Nevada. Pursuant to the Agreement, the
Company acquired certain assets of Millennium Prime Nevada, in exchange for the
issuance of 9,000,000 shares of the Company’s Common and 1,000,000 shares of the
Company’s Series A Preferred Stock. Further our Board of Directors unanimously
adopted a resolution approving an amendment to Certificate of Incorporation to
change our name from “Genio Group, Inc.” to “Millennium Prime, Inc.” (which
subsequently caused a change of our symbol and CUSIP), also to approve an
increase our of authorized common stock from Two Hundred Million (200,000,000)
par value $0.0001, to Two Hundred Fifty Million (250,000,000), par value $0.0001
per share, also to approve a 2000 for 1 reverse stock split, and also to
authorize Ten Million (10,000,000) shares of blank check preferred
stock.
On
October 29, 2009, the Company filed an amendment to its Certificate of
Incorporation to (i) change its name to Millennium Prime, Inc.; (ii) effect a
reverse split of all of the outstanding shares of its Common Stock at a ratio
of one-for-two thousand (1 for 2000); increase our authorized Common Stock
from Two Hundred Million (200,000,000) shares, par value $.0001 to Two Hundred
Fifty Million (250,000,000) shares, par value $.0001; and (iv) authorize Ten
Million (10,000,000) shares of Preferred Stock, par value $1.00 per share, with
such designation rights and preferences as may be determined from time to time
by our Board of Directors. Concurrently, with the foregoing, the Board of
Directors approved the creation of One Million (1,000,000) shares of Series A
Preferred Stock with the rights and preferences defined in the amendment to our
Certificate of Incorporation including the right of each issued and outstanding
share of Series A Preferred Stock to have the number of votes equal to the
result of: (a) the number of shares of our Common Stock issued and outstanding
at the time of such vote multiplied by 2.33334; and divided by (b) the total
number of Series A Preferred shares issued and outstanding at the time of the
vote.
As a
result of the 1 for 2000 reverse stock split the number of issued and
outstanding shares of our Common Stock was decreased from 99,981,787 to 51,284,
after issuing one (1) share of our Common Stock to stockholders who would be
entitled to a fractional share as a result of the reverse stock
split.
On
December 30, 2009, the Company executed a Restated and Amended Asset Purchase
Agreement (“Amended Agreement”), that amended the original Asset Purchase
Agreement dated June 21, 2009 by and among the Company, Millennium Prime Nevada
and the shareholders of Millennium Prime Nevada. The Amended Agreement provided
for an increase in the number of common shares issuable to the Millennium Prime
shareholders. As a result of the Amended Agreement the Company acquires
certain assets from Millennium Prime in exchange for: (i) an aggregate of One
Million (1,000,000) restricted shares of the Company’s Series A Preferred Stock,
$1.00 par value per share (the “Series A Preferred Stock”); and (ii) an
aggregate of Twenty-Seven Million (27,000,000) restricted shares of the
Company’s common stock $0.0001 par value per share.
The
Company completed the acquisition on December 30, 2009, at which time each of
the current officers and directors of the Company resigned and John F. Marchese
the President of Millennium Prime Nevada was elected to the Company’s board of
directors and was appointed the Company’s President and Chief Executive
Officer.
On April
9, 2010, the Company issued an aggregate of 160,000,000 shares of its Common
Stock to John F. Marchese (75,000,000), the Company’s CEO and Chairman of
the Board, and JPA Capital, LLC (85,000,000), a principal shareholder of
the Company to adjust the original purchase price of Millennium Prime, Inc. -
Nevada. The adjustment was made as a direct result of the Company being delisted
from the OTC-Bulletin Board due to the Company’s delinquent SEC filing status
caused by former management. The shares were issued in reliance upon the
exemptions from the registration requirements of the Securities Act of 1933, as
amended (the “Act”), pursuant to Section 4(2) of the Act. The certificates
evidencing the above mentioned shares contain a legend (1) stating that the
shares have not been registered under the Act and (2) setting forth or referring
to the restrictions on transferability and sale of the shares under the
Act.
On
December 30, 2009, the Company and an investor holding $1,760,000
principal amount of the Company’s issued and outstanding convertible debentures
agreed to convert their entire indebtedness into an aggregate of 500,000 shares
of our Common Stock.
On
December 30, 2009, the Company issued an aggregate of 500,000 shares of its
Common Stock to Steven A. Horowitz, the Company’s former sole officer and
director, and his designees and assigns. The shares were issued in
consideration of Mr. Horowitz’ efforts in settling some of the Company’s
indebtedness and for his General Release, releasing the Company from any and all
past, present and future obligations.
Historically,
the Company had been a developer and marketer of entertainment and leisure
products. Currently, our purpose is to execute the business plan of Millennium
Prime to develop innovative lifestyle brands for the Generation-Y
demographic in the beverage, apparel, merchandise and entertainment categories.
In addition to organic growth, we will seek the acquisition of new brands, as
well as strategic partnership with existing brands, to bolster our lifestyle
business lines serving our Millennial trendsetter focused
strategies.
This
discussion of the proposed business is purposefully general and is not meant to
be restrictive of our virtually unlimited discretion to search for and enter
into potential business opportunities. We anticipate that we may be able to
participate in only one potential business venture because we have nominal
assets and limited financial resources. This lack of diversification should be
considered a substantial risk to our stockholders because it will not permit us
to offset potential losses from one venture against gains from
another.
We may
seek a business opportunity with entities which have recently commenced
operations, or which wish to utilize the public marketplace in order to raise
additional capital in order to expand into new products or markets, to develop a
new product or service, or for other corporate purposes. We may acquire assets
and establish wholly-owned subsidiaries in various businesses or acquire
existing businesses as subsidiaries. We anticipate that the selection of a
business opportunity in which to participate will be complex and extremely
risky. Due to general economic conditions, rapid technological advances being
made in some industries and shortages of available capital, management believes
that there are numerous firms seeking the perceived benefits of a publicly
registered corporation. These perceived benefits may include facilitating or
improving the terms on which additional equity financing may be sought,
providing liquidity for incentive stock options or similar benefits to key
employees, providing liquidity (subject to restrictions of applicable statutes),
for all stockholders and other factors. Potentially, available business
opportunities may occur in many different industries and at various stages of
development, all of which will make the task of comparative investigation and
analysis of such business opportunities extremely difficult and
complex.
The
analysis of new business opportunities will be undertaken by, or under the
supervision of, Mr. John F. Marchese, our chief executive officer and sole
director, and our Board of Directors, and corporate advisors, all of whom may
not be considered professional business analysts. Mr. Marchese will be the
key person in the search, review and negotiation with potential acquisition or
merger candidates. We intend to concentrate on identifying preliminary
prospective business opportunities which may be brought to our attention through
present associations of our officers and directors, or by our stockholders. In
analyzing prospective business opportunities, we will consider such matters as
the available technical, financial and managerial resources; working capital and
other financial requirements; history of operations, if any; prospects for the
future; nature of present and expected competition; the quality and experience
of management services which may be available and the depth of that management;
the potential for further research, development, or exploration; specific risk
factors not now foreseeable but which then may be anticipated to impact our
proposed activities; the potential for growth or expansion; the potential for
profit; the perceived public recognition of acceptance of products, services, or
trades; name identification; and other relevant factors. We will not acquire or
merge with any company for which audited financial statements cannot be obtained
within the time period prescribed by applicable rules of the Securities and
Exchange Commission which is presently four business days from the closing date
of the transaction. This requirement for readily available audited financial
statement may require us to preclude a transaction with a potential candidate
which might otherwise be beneficial to our stockholders.
We will
not restrict our search for any specific kind of company, but may acquire a
venture which is in its preliminary or development stage, which is already in
operation, or in essentially any stage of its corporate life. It is impossible
to predict at this time the status of any business in which we may become
engaged, in that such business may need to seek additional capital, may desire
to have its shares publicly traded, or may seek other perceived advantages which
we may offer. However, we do not intend to obtain funds in one or more private
placements to finance the operation of any acquired business opportunity until
such time as we have successfully consummated such a merger or
acquisition.
We
anticipate that we will incur nominal expenses in the implementation of our
business plan described herein. Because we have no capital with which to pay
these anticipated expenses, these expenses will be paid by certain shareholders
as interest-free loans. However, the only opportunity to have these loans repaid
will be from a prospective merger or acquisition candidate. Repayment of any
loans made on our behalf will not impede, or be made conditional in any manner,
to consummation of a proposed transaction.
In
implementing a structure for a particular business acquisition, we may become a
party to a merger, consolidation, reorganization, joint venture, or licensing
agreement with another corporation or entity. We may also acquire stock or
assets of an existing business. On the consummation of a transaction, it is
probable that our present management and stockholders will no longer be in
control of our company. In addition, our directors may, as part of the terms of
the acquisition transaction, resign and be replaced by new directors without a
vote of our stockholders or may sell their stock. Any terms of sale of the
shares presently held by officers and/or directors will be also afforded to all
other stockholders on similar terms and conditions. Any and all such sales will
only be made in compliance with federal and applicable state securities
laws.
We
anticipate that any securities issued in any such reorganization would be issued
in reliance upon exemption from registration under applicable federal and state
securities laws. In some circumstances, however, as a negotiated element of a
transaction, we may agree to register all or a part of such securities
immediately after the transaction is consummated or at specified times
thereafter. If such registration occurs, of which there can be no assurance, it
will be undertaken by the surviving entity after we have successfully
consummated a merger or acquisition. The issuance of substantial additional
securities and their potential sale into any trading market which may develop in
our securities may have a depressive effect on the value of our securities in
the future, if such a market develops, of which there is no
assurance.
On April
15, 2010, we entered into a Securities Exchange Agreement with the principal
shareholders/members of Bong Spirit Imports, LLC (“Bong”) a Florida Limited
Liability Corporation pursuant to which the Company will acquire 100% of the
outstanding shares/membership interests in exchange for an aggregate of
30,000,000 shares of the Company’s common stock. On July 16, 2010, the
Company and the principal shareholders/members of Bong entered into an Amendment
to the Securities Exchange Agreement whereby the Company agreed to increase the
number of shares issuable to the Bong shareholders/members upon closing from
30,000,000 to 60,000,000. The closing of this transaction is subject to a
number of conditions including but limited to the Company providing Bong with
$400,000 of capital at the Closing. The Company anticipates that the
closing will occur no later than August 31, 2010. The Company has been a
marketing partner and financial investor in Bong since 2009, to date the Company
has loaned Bong approximately $341,000.
Bong is
an importer and distributor of premium alcohol products including Bong
Vodka, Bong’s offices are located in Orlando, Florida.
RESULTS
OF OPERATIONS
Because
we have not had any material business operations, other then the financing of
Bong Spirit Imports, LLC. , since the quarter ended December 30, 2004, we did
not have any revenues during the three and nine month periods ended June 30,
2010 and 2009.
General
and administrative expenses for the three months ended June 30, 2010 and 2009
were $32,193,369 and $88,451, respectively consisting of general and
administrative expense and, in the 2010 period, $32,000,000 of compensation
expense related to the April 9, 2010 issuance of 160 million shares previously
discussed. Interest expense for the three months ended June 30, 2010 and
2009 was $201,457 and $78,086 respectively, related to the convertible
debentures. Due to uncertainty concerning the priority of the security interest
in the Bong Spirit Imports LLC, the Company has fully reserved these notes as of
June 30, 2010.
General
and administrative expenses for the nine months ended June 30, 2010 and 2009
were $33,227,640 and $148,395, respectively consisting of general and
administrative expense and, in the 2010 period, $32,000,000 of compensation
expense related to the April 9, 2010 issuance of 160 million shares previously
discussed. Included in general and administrative expenses for the nine
months ended June 30, 2010 was $505,000 of expenses related to the issuance of
500,000 shares of common stock to our former Chairmen and CEO for services and
other consideration. Interest expense for the nine months ended June 30, 2010
and 2009 was $328,220 and $218,179, respectively, related to the convertible
debentures. Due to uncertainty concerning the priority of the security interest
in the Bong Spirit Imports LLC, the Company has fully reserved these notes as of
June 30, 2010.
LIQUIDITY
AND CAPITAL RESOURCES
As of
June 30, 2010, we had $399 in cash and cash equivalents. Net cash used in
operations for the nine months ended June 30, 2010 was $510,948 consisting
of a net loss of $33,648,702 offset by non cash items of $32,965,871
and an increase in accounts payable and accrued expenses of $171,883
. The Company issued $210,000 in Series A 8% convertible debentures during
the period ended June 30, 2010. The Company invested $92,842 in notes receivable
during the period ended June 30, 2010.
At June
30, 2010 we had total assets of $399 and an accumulated deficit of
$54,311,773 and the report from our independent registered public
accounting firm on our audited financial statements at September 30, 2009
contains an explanatory paragraph regarding doubt as to our ability to continue
as a going concern as a result of our significant recurring losses from
operations since inception. As discussed earlier in this report, in the
beginning of fiscal year 2005 we terminated our business operations and are now
seeking to acquire assets or shares of an entity actively engaged in a business
which generates revenues, or has the potential to generate revenues, in exchange
for our securities. We cannot predict when, if ever, we will be successful in
implementing this plan and, accordingly, we may be required to cease operations
at any time. We do not have sufficient working capital to pay our operating
costs for the next 12 months. We will require additional funds to pay our legal,
accounting and other fees associated with the company and our filing obligations
under federal securities laws, as well as to pay our other accounts payable
generated in the ordinary course of our business. We will also need funds to
satisfy the approximate $1.9 million of obligations on our balance sheet at June
30, 2010. We have no commitments from any party to provide such funds to us
except for the convertible debentures. If we are unable to obtain additional
capital as necessary, until such time as we are able to conclude a business
combination, we will be unable to satisfy our obligations and otherwise continue
to meet our reporting obligations under federal securities laws. In that event,
our stock would no longer be quoted on the OTC Bulletin Board and our ability to
consummate a business combination upon terms and conditions which would be
beneficial to our existing stockholders would be adversely
affected.
OFF-BALANCE
SHEET ARRANGEMENTS
We had no
off-balance sheet arrangements as of June 30, 2010.
ITEM 4
. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls
and Procedures
. We maintain “disclosure controls and procedures” as such
term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934. In
designing and evaluating our disclosure controls and procedures, our management
recognized that disclosure controls and procedures, no matter how well conceived
and operated, can provide only reasonable, not absolute, assurance that the
objectives of disclosure controls and procedures are met. Additionally, in
designing disclosure controls and procedures, our management necessarily was
required to apply its judgment in evaluating the cost-benefit relationship of
possible disclosure controls and procedures. The design of any disclosure
controls and procedures is also based in part upon certain assumptions about the
likelihood of future events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future
conditions.
Our
Chief Executive Officer and Chief Financial Officer, John F. Marchese, who
serves as our principal financial and accounting officer, has evaluated the
effectiveness of our disclosure controls and procedures as of the end of the
period covered by this report. Based on such evaluation, and as discussed in
greater detail below, our Chief Executive Officer and Chief Financial Officer
have concluded that, as of the end of the period covered by this report, our
disclosure controls and procedures were not effective:
•
to give reasonable assurance that the information
required to be disclosed by us in reports that we file under the Securities
Exchange Act of 1934 is recorded, processed, summarized and reported within the
time periods specified in the Securities and Exchange Commission’s rules and
forms, and
•
to ensure that information required to be disclosed
in the reports that we file or submit under the Securities Exchange Act of 1934
is accumulated and communicated to our management, including our CEO and our
Treasurer, to allow timely decisions regarding required disclosure.
During
the analysis of our internal controls at June 30, 2010 in connection with our
implementation of Section 404 of the Sarbanes-Oxley Act of 2002, we identified a
number of controls, the adoption of which are material to our internal control
environment and critical to providing reasonable assurance that any potential
errors could be detected. Our analysis identified control deficiencies related
to the start up of a new business venture or one time or first time
transactions. While we have taken certain remedial steps during the three months
ended June 30, 2010 to correct these control deficiencies, we have an inadequate
number of personnel with the requisite expertise in generally accepted
accounting principles to ensure the proper application thereof. Due to the
nature of these material weaknesses in our internal control over financial
reporting, there is more than a remote likelihood that misstatements which could
be material to our annual or interim financial statements could occur that would
not be prevented or detected.
Changes in Internal Control over
Financial Reporting.
There no other changes in our internal control over
financial reporting during our last fiscal quarter that has materially affected,
or is reasonably likely to materially affect, our internal control over
financial reporting.
PART II -
OTHER INFORMATION
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ITEM
1.
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LEGAL
PROCEEDINGS
|
None
In
addition to the other information set forth in this report, you should carefully
consider the factors discussed under the caption “Risk Factors” in Part I, "Item
1. Description of Business" in our Annual Report on Form 10-KSB for the year
ended September 30, 2009 which could materially affect our business prospects,
financial condition or future results. There have been no other material changes
during the three months ended December 30, 2009 to the risk factors discussed in
the periodic report noted above.
|
ITEM
2.
|
UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
|
On April
9, 2010, the Company issued an aggregate of 160,000,000 shares of its Common
Stock to John F. Marchese (75,000,000), the Company’s CEO and Chairman of
the Board, and JPA Capital, LLC (85,000,000), a principal shareholder of
the Company to adjust the original purchase price of Millennium Prime, Inc. -
Nevada. The adjustment was made as a direct result of the Company being delisted
from the OTC-Bulletin Board due to the Company’s delinquent SEC filing status
caused by former management. The shares were issued in reliance upon the
exemptions from the registration requirements of the Securities Act of 1933, as
amended (the “Act”), pursuant to Section 4(2) of the Act. The certificates
evidencing the above mentioned shares contain a legend (1) stating that the
shares have not been registered under the Act and (2) setting forth or referring
to the restrictions on transferability and sale of the shares under the
Act.
On
April 9, 2010, the Company issued 875,000 shares of its Common Stock to Private
Research Holdings LLC. The shares were issued as compensation for services
rendered to the Company by each recipient. The shares were issued in reliance
upon the exemptions from the registration requirements of the Securities Act of
1933, as amended (the “Act”), pursuant to Section 4(2) of the Act. The
certificates evidencing the above mentioned shares contain a legend (1) stating
that the shares have not been registered under the Act and (2) setting forth or
referring to the restrictions on transferability and sale of the shares under
the Act.
On April
9, 2010, the Company issued 22,000,000 shares of its Common Stock to Quest
Capital Markets, Inc. and its assignees upon the conversion of an aggregate of
$22,000.00 of outstanding indebtedness. The original debt was incurred by
the Company in 2004. The certificates evidencing the above mentioned
shares were issued without legend in that Rule 144 permits the Quest to tack
back to the date of the debt which was more than one year prior to
issuance.
The
Company issued $985,000.00 of Series A 8% convertible debentures. The
Series A debentures are due and payable on the earlier of (a) nine months from
the date of issuance or (b) when such amounts are declared due and payable
by the holder or automatically due and payable upon or after an event of default
(as defined in the debenture).
The holder has the right
until August 31, 2010 to convert any outstanding and unpaid principal and/or
accrued interest due under the debentures into fully paid and nonassessable
shares of the Company’s Common Stock at seventy-five percent (75%) of the
five-day average closing bid price of the Company’s Common Stock for the five
(5) trading days immediately prior to the date of the Conversion Notice, but in
no event shall the conversion price be less than $.04 or greater than $.08 per
share. After August 31, 2010 and expiring on the Maturity Date the holder shall
have the right to convert any outstanding and unpaid principal and/or accrued
interest due under the debentures into fully paid and nonassessable shares of
the Company’s Common Stock at a fixed conversion price of $.20 per share (“Fixed
Conversion Price”). To date, the Company has received conversion notices
from holders of an aggregate principal amount of $765,000 of the
debentures. Inclusive of accrued interest of $60,813, the Company is
obligated to issue the holders an aggregate of 20,740,325 shares.
|
ITEM
3.
|
DEFAULTS
UPON SENIOR DEBT
|
None
|
ITEM
4.
|
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY
HOLDERS
|
We
amended our Certificate of Incorporation to increase the number of shares of
Common Stock the Company is authorized to issue to 1,000,000,000.stockholders of
record at the close of business on April 20, 2010 representing 88.6% of
our issued and outstanding Common Stock gave their written consent to the above
corporate actions. This written consent was obtained pursuant to Section
228(a) of the Delaware General Corporation Law, as amended.
ITEM 5.
OTHER INFORMATION
On April
15, 2010, we entered into a Securities Exchange Agreement with the principal
shareholders/members of Bong Spirit Imports, LLC (“Bong”) a Florida Limited
Liability Corporation pursuant to which the Company will acquire 100% of the
outstanding shares/membership interests in exchange for an aggregate of
30,000,000 shares of the Company’s common stock. On July 16, 2010,
the Company and the principal shareholders/members of Bong entered into an
Amendment to the Securities Exchange Agreement whereby the Company agreed to
increase the number of shares issuable to the Bong shareholders/members upon
closing from 30,000,000 to 60,000,000. The closing of this
transaction was subject to a number of conditions including but limited to
the Company providing Bong with $400,000 of capital at the Closing. The
Company anticipates that the closing will occur no later than August 31,
2010. The Company has been a marketing partner and financial investor in
Bong since 2009, to date the Company has loaned Bong approximately
$341,000.
Bong is
an importer and distributor of alcohol products including Bong Vodka, Bong’s
offices are located in Orlando, Florida.
ITEM
6. EXHIBITS
Exhibits:
31.1
Certification of the Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
32.1
Certification of the Chief Executive and Financial Officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
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.
|
|
|
Millennium
Prime, Inc.
|
|
|
|
(Registrant)
|
|
|
|
|
|
Date:
August 20, 2010
|
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/s/
John F. Marchese
|
|
|
|
|
|
|
|
Chief
Executive and Financial Officer (principal executive and accounting
officer)
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Millennium Prime (PK) (USOTC:MLMN)
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