Beverly Hills Weight Loss & Wellness (BHWW) 10QSB Quarterly report (small business)

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-QSB

[X]QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2004

[  ]TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________.

Commission file number 000-28733

Beverly Hills Weight Loss and Wellness, Inc.

(Exact name of registrant as specified in its charter)

Nevada (State or other jurisdiction of incorporation or organization)	88-0430607 (I.R.S. Employer Identification No.)
120 International Parkway, Suite 120 Heathrow, FL (Address of principal executive offices)	32746 (Zip Code)

Registrant’s telephone number, including area code (757) 497-8899

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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.  YesX  No      .

Applicable only to issuers involved in bankruptcy proceedings during the preceding five years

Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes        No           .

Applicable only to corporate issuers

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date. As of August 20, 2004, there were 55,118,062

shares of common stock, par value $0.0001, issued and outstanding.

Transitional Small Business Disclosure Format

(check one):

Yes ____  No   X   .

Beverly Hills Weight Loss and Wellness, Inc.

TABLE OF CONTENTS

PART I		3
Item 1	Financial Statements	3
Item 2	Management's Discussion and Analysis or Plan of Operation	17
Item 3	Controls and Procedures	20
PART II		21
Item 1	Legal Proceedings	21
Item 2	Changes in Securities and Use of Proceeds	21
Item 3	Defaults Upon Senior Securities	21
Item 4	Submission of Matters to a Vote of Security Holders	21
Item 5	Other Information	22
Item 6	Exhibits and Reports on Form 8-K	23

PART I – FINANCIAL INFORMATION

This Quarterly Report includes forward-looking statements within the meaning of the Securities Exchange Act of 1934 (the “Exchange Act”). These statements are based on management’s beliefs and assumptions, and on information currently available to management. Forward-looking statements include the information concerning possible or assumed future results of operations of the Company set forth under the heading “Management’s Discussion and Analysis of Financial Condition or Plan of Operation.” Forward-looking statements also include statements in which words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “consider” or similar expressions are used.

Forward-looking statements are not guarantees of future performance. They involve risks, uncertainties and assumptions. The Company’s future results and shareholder values may differ materially from those expressed in these forward-looking statements. Readers are cautioned not to put undue reliance on any forward-looking statements.

ITEM 1Financial Statements

3

BEVERLY HILLS WEIGHT LOSS AND WELLNESS, INC.
CONSOLIDATED BALANCE SHEET
As of June 30, 2004 and December 31, 2003
ASSETS
		6/30/2004		12/31/2003
CURRENT ASSETS
Cash	$	-	$	1,131
Accounts receivable:
Royalties and rebates (note 1)		11,537		11,537
Total Current Assets		11,537		12,668
PROPERTY AND EQUIPMENT
At cost net of accumulated depreciation		3,840		3,840
OTHER ASSETS
Franchise contract rights (note 7)		1,063,760		1,063,760
Investment (note 7)		66,000		66,000
TOTAL ASSETS	$	1,145,137	$	1,146,268

The accompanying notes are an interal part of these consolidated financial statements.

4

BEVERLY HILLS WEIGHT LOSS AND WELLNESS, INC.
CONSOLIDATED BALANCE SHEET
As of June 30, 2004 and December 31, 2003
LIABILITIES AND STOCKHOLDERS' EQUITY
		6/30/2004			12/31/2003
CURENT LIABILITIES
Bank overdraft	$	654		$	-
Accounts payable and accrued expenses		161,891			134,623
Due to related parties (note 10)		132,024			89,610
Loans payable		86,835			28,100
Contract payable-Current portion (note 5)		88,250			96,020
Total current liabilities		469,654			348,353
LONG-TERM LIABILITIES
Contract payable (note 5)		178,917			171,147
Convertible debenture (note 6)		86,000			86,000
Total long-term liabilities		264,917			257,147
TOTAL LIABILITIES		734,571			605,500
SHAREHOLDERS' EQUITY
Preferred stock - $.0001 par value
authorized 10,000,000 shares
issued and outstanding: none		-			-
Common stock - $.0001 par value;
authorized 500,000,000 shares;
issued and outstanding: 55,122,489 and 47,613,533		5,512			5,462
Additional paid-in-capital		2,720,804			2,680,854
Accumulated deficit		(2,315,750	)		(2,145,548	)
Total shareholders' equity		410,566			540,768
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,145,137		$	1,146,268

The accompanying notes are an interal part of these consolidated financial statements.

5

BEVERLY HILLS WEIGHT LOSS AND WELLNESS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three and six months ended June 30, 2004 and 2003
		Three Months ended						Six Months ended
		6/30/2004			6/30/2003			6/30/2004			6/30/2003
REVENUES
Revenue	$	2,534		$	36,989		$	10,104		$	89,858
TOTAL REVENUES		2,534			36,989			10,104			89,858
EXPENSES
General and administrative		88,627			153,491			157,796			216,563
TOTAL EXPENSES		88,627			153,491			157,796			216,563
OPERATING INCOME (LOSS)		(86,093	)		(116,502	)		(147,692	)		(126,705	)
Interest expense		(11,255	)		(7,080	)		(22,510	)		(14,160	)
NET INCOME (LOSS)	$	(97,348	)	$	(123,582	)	$	(170,202	)	$	(140,865	)
Basic and diluted income (loss) per share:							$	(0.00	)	$	(0.00	)
							(less than $.01 per share)
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING								54,872,486			48,730,407

The accompanying notes are an interal part of these consolidated financial statements.

6

BEVERLY HILLS WEIGHT LOSS AND WELLNESS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
As of June 30, 2004
					Additional
	Common Stock				Paid-In		Accumulated
	Shares		Amount		Capital		Deficit			Total
Balances, December 31, 2001	35,114,881	$	3,511	$	394,336	$	(670,949	)	$	(273,102	)
Issuance of stock for services	1,394,652		140		124,326					124,466
Issuance of stock for acquisition of
Advanced Wellness franchise rights	3,204,000		320		127,840					128,160
Issuance of stock for acquisition of
Beverly Hills Weight Loss & Wellness
franchise rights	6,200,000		620		619,380					620,000
Issuance of stock for conversion of debentures	1,625,000		162		64,838					65,000
Issuance of stock for interest on debentures	75,000		8		2,992					3,000
Net Loss							(76,310	)		(76,310	)
Balances, December 31, 2002	47,613,533		4,761		1,333,712		(747,259	)		591,214
Issuance of stock for conversion of debt	50,000		5		4,995					5,000
Issuance of for services	6,758,956		676		1,276,167					1,276,843
Issuance of stock for investment	200,000		20		65,980					66,000
Net Loss							(1,398,289	)		(1,398,289	)
Balances, December 31, 2003	54,622,489		5,462		2,680,854		(2,145,548	)		540,768
Stock issued as officer compensation
on June 7, 2004 for a value
of $40,000 or $0.08 per share	500,000		50		39,950					40,000
Net Loss							(170,202	)		(170,202	)
Balances, June 30, 2004	55,122,489	$	5,512	$	2,720,804	$	(2,315,750	)	$	410,566

The accompanying notes are an interal part of these consolidated financial statements.

7

BEVERLY HILLS WEIGHT LOSS AND WELLNESS, INC.

F/K/A WEIGHT LOSS FOREVER INTERNATIONAL, INC.

Notes to Consolidated Financial Statements

June 30, 2004

(1)Summary of Significant Policies

(a)Nature of Operations

Beverly Hills Weight Loss and Wellness, Inc. (f/k/a Weight Loss Forever International, Inc)., (the “Company”) a Nevada corporation, franchises weight loss centers under the trade names Weight Loss Forever® and Beverly Hills Weight Loss & Wellness®, through subsidiary corporations, Weight Loss Management, Inc. and Beverly Hills Franchising Corp.

At March 31, 2004, the Company franchised 20 Weight Loss Forever® centers and 21 Beverly Hills Weight Loss & Wellness® clinics. At December 31, 2002, the Company franchised 20 Weight Loss Forever® centers and 20 Beverly Hills Weight Loss & Wellness® clinics. The Company, in addition to being a franchisor, had previously operated company-owned locations. As of May 31, 2002, the Company disposed of all its company-owned locations to concentrate on franchising. The franchised locations are primarily in Virginia, North Carolina, New England and Florida. The Company receives a non-refundable franchise fee, generally $20,000, from entities which enter into an agreement with the Company to own and operate a retail location. The franchisees are required to purchase the necessary furniture, fixtures, equipment and inventory either from the Company, from an affilia te of the Company, or from a source approved by the Company. During the term of the agreement, the Company receives a service fee equal to six percent of gross sales, payable weekly. Area developers receive a rebate on their units' royalty fees and a discount on product orders. New agreements provide for a franchise term of ten years subject to renewal. The agreements provide for other fees and charges based on various conditions and circumstances. The Company provides operational assistance, training, periodic inspections, and continuing new product development. The Company also has the right to establish an advertising fund to which the franchisees would contribute. This fund has not yet been established.

(b)Principles of Consolidation

The consolidated financial statements of the Company include the accounts of Weight Loss Forever International, Inc. and its subsidiaries, Weight Loss Management, Inc., from the date of its incorporation, June 4, 2002, and Beverly Hills Franchising Corp., from the date of its incorporation, October 31, 2002. All significant intercompany account balances and transactions between the Company and its subsidiaries have been eliminated in consolidation.

(c)Inventories

The Company holds no inventory.

(d)Property and Equipment

The Company owns an internet website valued at cost, $3,840. The Company provides depreciation for machinery and equipment using the straight-line method over the estimated useful lives of the respective assets, which range from three to 39 years. Amortization of leasehold improvements is computed using the straight-line method over the lesser of the lease term or estimated useful lives of the improvements.

8

(e)Research and Development Costs

Research and development costs are charged against income in the year incurred.

(f)Revenue Recognition

The principal sources of revenue are derived from the collection of franchise royalties based on a percentage of the franchisee gross receipts and franchisee licensing fees and purchase rebates. Income from royalties is recognized as earned. Revenue from franchisee licensing and revenue from area franchise agreements are recognized as the initial agreements are signed. Product rebates are recognized as products are purchased.

(g)Advertising Costs

Advertising expenditures relating to product distribution and marketing efforts consisting primarily of franchise materials, product presentation material, catalog preparation, printing and postage expenses are expensed as incurred.

(h)Use of Estimates

The Company’s management has made certain estimates and assumptions relating to the reporting of assets and liabilities and disclosure of contingent assets and liabilities to prepare these financial statements in conformity with generally accepted accounting principles. Actual results could differ from those estimates.

(i)Financial Instruments Fair Value, Concentration of Business and Credit Risks

The carrying amount reported in the balance sheet for cash, accounts receivable, accounts payable and accrued expenses approximates fair value because of the immediate or short-term maturity of these financial instruments. The carrying amount reported in the accompanying balance sheet for convertible debentures approximates fair value because the actual interest rate does not significantly differ from current rates offered for instruments with similar characteristics. Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of trade and royalty accounts receivable which amount to approximately $10,000. The Company performs periodic credit evaluations of its franchisees and generally does not require collateral. The Company maintains its cash balances at certain financial institutions in which balances are insured by the Feder al Deposit Insurance Corporation up to $100,000.

(j)Stock-Based Compensation

In October 1995, the Financial Accounting Standards Board issued Statements of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation”; (SFAS 123) which sets forth accounting and disclosure requirements for stock-based compensation arrangements. The new statement encourages but does not require, companies to measure stock-based compensation using a fair value method, rather than the intrinsic value method prescribed by Accounting Principles Board Opinion No. 25 (“APB No. 25”.) The Company has adopted disclosure requirements of SFAS 123 and has elected to continue to record stock-based compensation expense using the intrinsic value approach prescribed by APB No. 25. Accordingly, the Company computes compensation cost for each employee stock option granted as the amount by which the quoted market price of the Company's common stock on the date of grant exceeds the amount the employee must pay to acquire the stock. The amount of compensation cost, if any, will be charged to operations over the vesting period. SFAS 123 requires companies electing to continue using the intrinsic value method to make certain pro forma disclosures (see note 7).

9

(k)Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

(l)Cash Flows

For purposes of cash flows, the Company considers all highly liquid investments with an initial maturity of three months or less to be cash equivalents.

(m)Earnings Per Common Share

Basic earnings per common share have been computed based upon the weighted average number of common shares outstanding during the years presented. Common stock equivalents resulting from the issuance of the stock options and warrants have not been included in the calculations because such inclusion would be antidilutive.

(2)History and Corporate Developments

 Reverse Merger with youticket.com, inc.

Weight Loss Forever International, Inc. (WLFI-VA) was incorporated in 1995, in the state of Virginia. WLFI-VA franchised the right to own and operate retail centers selling weight loss products under the Weight Loss Forever® trade name. WLFI-VA began selling franchises in June 1996, and granting area development requests, whereby area developers may operate multiple stores within a geographic territory. It is also the sole source supplier of products associated with the Weight Loss Forever® program.

On September 30, 2001, WLFI-VA agreed to exchange shares with youticket.com, inc. (YTIX), a Nevada public company. Accordingly, WLFI increased its authorized share capital to facilitate, and to effectuate, the exchange of 10,304,200 shares of WLFI-VA stock for 26,004,716 shares of youticket.com, inc. stock in a business combination accounted for as a reverse acquisition. During the period youticket.com was in existence, prior to the reverse acquisition, it had minimal operations. For accounting purposes, the reverse acquisition is reflected as if WLFI-VA issued its stock for the net assets of YTIX. The net assets of YTIX were not adjusted in connection with the reverse acquisition since they were monetary in nature. Subsequent to the reverse acquisition, youticket.com, inc. changed its name to Weight Loss Forever International, Inc.

Saleof WLFI-VA

On May 31, 2002, the Company sold all of the issued and outstanding stock of the Company's subsidiary WLFI-VA to a corporation owned by the Company's president. The transaction resulted in a gain to the Company of approximately $209,000. The Company also acquired from WLFI-VA all rights to franchise the Weight Loss Forever® concept and all related intellectual property. The Company also changed its operations so as to only franchise weight loss centers and no longer own and operate them. Accordingly, the financial statements have been restated to reflect WLFI-VA as a discontinued operation.

10

Acquisition of Assets of Advanced Wellness Corp.

In June 2002, the Company acquired various franchising rights and intellectual property from Advanced Wellness Corp., located in South Florida.

Formation of Weight Loss Management, Inc.

On June 4, 2002, the Company formed Weight Loss Management, Inc., a wholly owned Florida corporation to hold the franchising assets of the Weight Loss Forever® concept and to conduct the business of selling and servicing Weight Loss Forever® franchises which are presently located in Virginia, North Carolina and Florida.

Acquisition of Assets ofBeverly HillsWeight Loss & Wellness and Formation ofBeverly HillsFranchising Corp.

Beverly Hills Franchising Corp., was formed on October 31, 2002 as a Florida corporation. From inception, it has been a wholly owned subsidiary of Weight Loss Forever International, Inc., a Nevada corporation. Beverly Hills Franchising Corp. was organized to hold the franchising assets of the Beverly Hills Weight Loss & Wellness® concept and to conduct the business of selling and servicing Beverly Hills Weight Loss & Wellness franchises. Beverly Hills Franchising Corp. acquired franchise agreements with 22 clinics located in North Carolina, Virginia, Rhode Island, New Hampshire, Kentucky and Colorado and is presently offering franchises in those and other states pursuant to the Beverly Hills Weight Loss & Wellness® Uniform Offering Circular.

(3)Goodwill

As a consequence of the sale by the Company, on May 31, 2002, of its subsidiary WLFI-VA, the Company disposed of all recorded goodwill resulting from prior acquisitions made by the subsidiary. Although, as of December 31, 2002, the Company did not include goodwill as a corporate asset, it has adopted Financial Accounting Standards Board (FASB) approved SFAS No. 142, “Goodwill and Other Intangible Assets”, and will not, in the future, amortize goodwill and other intangible assets with indefinite lives. The Company plans to test goodwill for impairment on an annual basis or on an interim basis if an event occurs or circumstances change that would reduce the fair value of a reporting unit below its carrying value.

(4)Property and Equipment

Property and equipment consists of the following at December 31, 2003 and 2002:

	2003		2002
Furniture and equipment	$	-	$	-
Website		3,840		-
Leasehold improvements		-		-
		3,840		-
Less accumulated depreciation and amortization		-		-
	$	3,840	$	-

11

(5)Contract Payable

As part of the consideration for the assets acquired by it, the Company entered into a five-year consulting agreement with Bolianites Enterprises, LLC, which is owned by the president of the seller of the franchising assets referred to in Note 2 above. The total to be paid pursuant to the agreement is $375,000, payable in 60 monthly payments of $6,250. The consulting agreement does not provide for any specific obligations on the part of Bolianites Enterprises, LLC other than the requirement that its managing member, Mr. Charles Bolianites, serve on the Board of Directors of Weight Loss Forever International, Inc. The Company has treated the discounted value of the contract as an additional cost of the assets acquired. The contract payable in the total amount of $375,000 has been discounted to its present value of $285,000, based on an interest rate of 12%. As monthly payments are ma de in the future, approximately 76% will be applied to the contract payable and the balance would be interest expense.

(6)Convertible Debentures

 Series A Debentures

On September 30, 2001, the Company issued $101,000 of one-year 12% convertible debentures. During 2002, $15,000 of principal amount of the debentures were converted into 375,000 shares of the Company’s common stock. The maturity date of the remaining $86,000 of debentures was extended to December 31, 2004. The debentures are convertible at the option of the holders at the conversion price of $0.04 per share or a total of 2,150,000 shares.

Series B Debentures

In June 2002, the Company issued $50,000 of one-year 12% convertible debentures. As of December 31, 2002, the debentures were converted into 1,250,000 shares of the Company’s common stock. Also, as of December 31, 2002, accrued interest on the debentures in the amount of $3,000 was converted into 75,000 shares of common stock.

(7)Stockholders' Equity

On June 7, 2004 the Company issued 500,000 common shares for services by the Company’s Secretary for a value of $40,000, or $0.08 per share.

On January 6, 2003 the Company issued 50,000 common shares for services for a value of $5,000, or $0.10 per share.

On January 6, 2003 the Company issued 50,000 common shares to retire debt owed by the Company for a value of $5,000, or $0.10 per share.

On April 1, 2003 the Company issued 3,058,956 common shares for services for a value of $458,843, or $0.15 per share

On August 13, 2003 the Company issued 2,400,000 common shares for services for a value of $468,000, or $0.195 per share.

On October 30, 2003 the Company issued 750,000 common shares for services for a value of $180,000, or $0.24 per share.

On November 26, 2003 the Company issued 500,000 common shares for services for a value of $165,000, or $0.33 per share.

On November 26, 2003 the Company issued 200,000 common shares for an investment in Tammy Philips Fitness Boot Camp, LLC, a 50% interest, for a value of $66,000, or .33 per share.

12

Investment

The Company invested in Tammy Philips Fitness Boot Camp, LLC, a 50% interest, for a value of $66,000, or .33 per share as noted above with the issuance of 200,000 common shares of Company stock. The value of the stock issued was based on the trading value of the Company’s stock in a public market and approximates the fair value of the investment. The investment may be considered temporary by the Company’s management and therefore is accounted for at its fair value. The method of accounting for this investment may change depending on management’s future plans regarding this investment and therefore the equity method and consolidation method may be future options. The Company applies Financial Accounting Standard No. 115, “Accounting for Certain Investments in Debt and Equity Securities”, for its investments.

ReverseSplit

On June 4, 2001, the Company's shareholders approved a 1-for-30 reverse split of the common stock. All references to shares have been adjusted retroactively.

Stock Options and Warrants

During 1999, YTIX granted options to purchase 15,000 shares of common stock. These options were granted with an exercise price of $0.25 with a term of five years.

During 2000, YTIX granted options to employees to purchase 400,000 shares of common stock. These options were granted with an average exercise price of $0.21 with a term of five and one half years. No options were granted in 2001, 2002 and 2003.

In June 2001, the board of directors of the Company approved the 2001 Stock Option Plan that authorized up to 3,000,000 shares to be issued. The Company has reserved 3,000,000 shares of Common Stock for issuance under this plan.

The Company has also granted options under non-qualified option agreements.

Activity under the performance equity plan and non-qualified option agreements is as follows:

	Shares		Weighted Average Exercise Price
Outstanding at December 31, 2002	42,750	$	8.71
Granted	-		-
Exercised	-		-
Canceled	-		-
Outstanding at December 31, 2003	42,750	$	8.71

13

In September 2001, the Company granted warrants to purchase 3,398,440 shares of common stock to an investor relations firm which has entered into a consulting agreement with the Company. The warrants, which expire at various dates between June 30, 2003 and March 31, 2004, were granted at exercise prices ranging from $.035 - $.08 which were below the market value of the underlying stock at the date of the grant. Accordingly, the Company, in 2001, recorded consulting fee expense of $144,433 in connection with this transaction. In addition, the Agreement provided for the issuance of a total of 3,228,518 shares of common stock in exchange for consulting services. At December 31, 2001, 2,208,986 shares had been issued in connection with the consulting agreement described herein. In September 2002, the consulting agreement was extended for an additional year. The extended agreement provid es for payment of 3,398,440 shares of common stock of which 1,019,652, valued at $101,965, were issued as of December 31, 2002. No shares were issued during the year ended December 31, 2003.

All other stock options issued to employees have an exercise price not less than the fair market value of the common stock on the date of grant, and in accounting for such options utilizing the intrinsic value method, there is no related compensation expense recorded in the Company's consolidated financial statements. If compensation cost for stock-based compensation had been determined based on the fair market value of the stock options and stock purchase warrants on their dates of grant in accordance with SFAS 123, the Company's net loss for the year ended December 31, 2003 and 2002 would have been:

		2003			2002
Net loss:
As reported	$	(1,398,289	)	$	(76,310	)
Pro forma		(1,389,289	)		(76,310	)
Basic and diluted loss per common share:
As reported	$	( 0.027	)	$	( 0.002	)
Pro forma		(0.027	)		(0.002	)

Additional information relating to stock options and warrants outstanding and exercisable at December 31, 2003, summarized by exercise price follows:

Outstanding Weighted Average					Exercisable Weighted Average
	Life			Exercise				Exercise
Shares	(Years	)		Price		Shares		Price
6,500	.9		$	7.50		6,500	$	7.50
3,333	2.4			8.10		3,333		8.10
12,917	1.4			8.45		12,917		8.45
20,000	.8			9.38		20,000		9.38
42,750						42,750

14

The computation of the effect on net earnings and earnings per share with respect to outstanding options and warrants in accordance with SFAS 123 was calculated using the Black-Scholes option-pricing model which included the following significant assumptions:

		Purchase
	Options	Warrants
Risk-free interest rate	7.0%	5.0%
Expected volatility	5.0%	5.0%
Expected dividend yield	0.0%	0.0%
Expected life	6.5 years	2 years

The weighted average fair value at the date of grant of the options granted during 2000 and 1999 was $0.21 and $0.28 per option, respectively.

Acquisition of Franchise Rights of Advanced Wellness

In June 2002, the Company issued 3,204,000 shares of common stock, valued at $0.04 per share for total of $128,160 for the acquisition of the franchise rights and intellectual property of Advanced Wellness Corp.

Acquisition of Franchise Contract Rights ofBeverly HillsWeight Loss & Wellness

On October 30, 2002, the Company acquired intellectual property, franchise agreements, trademarks and the rights to the names Beverly Hills Weight Loss & Wellness® and Roseglen Weight Loss and Wellness® for 6,200,000 shares of the Company’s stock, valued at $620,000 or $0.10 per share. As additional consideration, the Company entered into a five-year consulting agreement with Bolianites Enterprises, LLC at $75,000 per year. (See Contract Payable - Note 5.)

(8)Income Taxes

At December 31, 2003, the Company had net operating loss carryforwards of approximately $2,145,548 for financial statement and income tax purposes which will expire in varying amounts through 2023. Due to change in ownership, the losses will be limited in their use and management has not determined the amount of losses that may ultimately be utilized. Realization of deferred tax assets is dependent upon generating sufficient taxable income prior to their expiration. A valuation allowance equal to the tax benefit of the net operating losses has been established since it is uncertain that future taxable income will be realized during the carryforward period. Accordingly, a provision for income taxes had not been recorded in the accompanying financial statements.

(9)Lease Commitments

Office facilities have been provided, without charge, to the Company by shareholder, Ultimate Franchise Systems, Inc. This arrangement is not covered by a lease. The Company may be required to pay rent in the future. As of December 31, 2003, the Company was not obligated under any lease commitments.

Total lease and rental expense for continuing operations was $0 in 2003 and 2002.

15

(10)Related Party Transactions

At December 31, 2003 and 2002, the Company has balances due from affiliates amounting to $0 and $100, respectively. The Company has received advances from certain related parties during the years ending December 31, 2003 and 2002. The balances at December 31, 2003 and 2002 amount to $89,610 and $68,600, respectively. The advances are due on demand and are non-interest bearing.

In June 2002, a firm, which was owned at that time by two Company directors, acquired $50,000 of the Company’s convertible debentures. As of December 31, 2002, the debentures, together with accrued interest, were converted into shares of the Company’s common stock.

On May 31, 2002, the Company sold its wholly owned subsidiary, WLFI-VA to a corporation owned by the Company’s president. Pursuant to that agreement, the Company’s president is now the area developer for Weight Loss Forever for the states of Virginia and North Carolina and the owner of several franchises in those states.

In June 2002, the Company acquired certain franchise contract and royalty rights from Advance Wellness Corporation (AWC). After that acquisition, an employee of AWC became a director of the Company.

In October 2002, the Company acquired the assets of Beverly Hills Weight Loss & Wellness from Charles Bolianites. Upon completion of the acquisition, Mr. Bolianites, became a director of the Company. As part of the acquisition, the Company entered into a consulting agreement whereby Mr. Bolianites is scheduled to receive $6,250 per month for 60 months.(See Consulting Agreement- Note 5)

(11)Going Concern

The Company's consolidated financial statements have been presented on a going concern basis which contemplates the realization and the satisfaction of liabilities in the normal course of business. As more fully described below, the liquidity of the Company has been adversely affected by significant losses from operations. The Company reported net losses of $1,398,289 and $76,310 for the years ended December 31, 2003 and 2002, respectively. Additionally, there is a working capital deficit of $335,685 at December 31, 2003.

These conditions raise substantial doubt about the Company's ability to continue as a going concern without additional capital contributions and/or achieving profitable operations. Management's plans are to generate revenue from the sale of new franchises and to raise additional capital through either debt or equity instruments.

16

ITEM 2Managements Discussion and Analysis or Plan of Operation

Disclaimer Regarding Forward Looking Statements

Our Management’s Discussion and Analysis contains not only statements that are historical facts, but also statements that are forward-looking (within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934). Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include international, national and local general economic and market conditions; demographic changes; our ability to sustain, manage, or forecast growth; our ability to successfully make and integrate acquisitions; raw material costs and availability; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating re sults; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; and other risks that might be detailed from time to time in our filings with the Securities and Exchange Commission.

Although the forward-looking statements in this Quarterly Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report and in our other reports as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.

Overview

We franchise weight loss and nutrition retail clinics offering all-natural herbal dietary supplements. As of June 30, 2004, we have franchised 20 Weight Loss Forever® centers, 19 Beverly Hills Weight Loss & Wellness® clinics, and we have 3 Tammy Phillips Fitness Boot Camps opened and another 30 under contract. We generate revenue through royalty agreements, and we generally receive 6% of the revenues of our franchised locations, payable on a weekly basis.

We have historically grown by selling additional franchises, and we have done several acquisitions. We anticipate continuing to grow using these methods. We have 30 Tammy Phillips Boot Camps under contract, which we anticipate will increase our revenues in the next fiscal year.

Explanatory Paragraph in Report of Our Independent Certified Public Accountants

Our independent accountants have included an explanatory paragraph in their most recent report, stating that our audited financial statements for the period ending December 31, 2003 were prepared assuming that we will continue as a going concern. However, they note that we have not yet generated significant revenues, that we have experienced net losses, that we continue to have a large accumulated working capital deficit, and that there are no assurances that we will be able to meet our financial obligations in the future.

Our independent accountants included the explanatory paragraph based primarily on an objective test of our historical financial results. Our going concern paragraph may be viewed by some shareholders and investors as an indication of financial instability, and it may impair our ability to raise capital.

17

Three Months Ended June 30, 2004 Compared to Three Months Ended June 30, 2003

Results of Operations

Introduction

Our operations for the second quarter of 2004 were essentially the same as for the same quarter in 2003. Since 2002, we disposed of all of our company-owned locations and have focused our business plan only on being a franchisor and on targeting one or more acquisition candidates.

Revenues and Loss from Operations

Our revenue, general and administrative expenses, and loss from continuing operations for the quarter ended June 30, 2004 as compared to the quarter ended June 30, 2003 and the quarter ended March 31, 2004 are as follows:

	Quarter Ended June 30, 2004	Quarter Ended June 30, 2003	Quarter Ended March 31, 2004
Revenue	$ 2,534	$ 36,989	$ 7,570
General & Administrative Expenses	88,627	153,491	69,169
Loss from Operations	(86,093)	(116,502)	(61,599)

Our revenue for the second quarter of 2004 is significantly less than the first quarter because discounted royalties were granted to franchisees to assist in expanding the number of their clinic locations. Our revenue for the second quarter of 2004 is significantly less than the same quarter in 2003, because of this same plan being continued by management.

Our general and administrative expenses for the second quarter of 2004 are significantly less than the expenses for the second quarter of 2003, $88,627 compared to $153,491, respectively, as we are no longer operating Company stores. Our general and administrative expenses for the first quarter of 2004 were relatively the same.

Interest Expense, Taxes, and Net Loss

Our interest expense, taxes, and net loss for the quarter ended June 30, 2004 as compared to the quarter ended June 30, 2003 and the quarter ended March 31, 2004 are as follows:

	Quarter Ended June 30, 2004	Quarter Ended June 30, 2003	Quarter Ended March 31, 2004
Interest Expense	$ 11,255	$ 7,080	$ 11,255
Taxes	-	-	-
Net Loss	(97,348)	(123,582)	(72,854)

18

Liquidity and Capital Resources

Introduction

During the second quarter of 2004, as with all of 2003, we did not generate positive operating cash flows. As the Tammy Phillips Boot Camps are opened, and as our franchise stores increase operations, we anticipate an increase in our operating cash flow. We also anticipate that one-time and transaction related expenses will decrease, as they have during the first and second quarters of 2004. However, we will likely not achieve positive operating cash flow during 2004. To date, we have funded operations primarily through the issuance of equity securities, and anticipate continuing to do so in 2004.

Our cash, current assets, total assets, current liabilities, and total liabilities as of June 30, 2004 as compared to March 31, 2004 were:

	As of June 30, 2004	As of March 31, 2004	Change
Cash	$ (654)	$ 3,025	$ (3,679)
Total current assets	11,537	14,562	(3,025)
Total assets	1,145,137	1,148,162	3,025
Total current liabilities	469,654	415,331	54,323
Total liabilities	734,571	680,248	54,323

Cash Requirements

For the six months ended June 30, 2004 our net cash used in operating activities was ($102,934), as compared to ($8,496) for the six months ended June 30, 2003. Negative operating cash flows during the six months were primarily created by a net loss from operations of $147,692, offset by an increase in accounts payable and accrued expenses of $27,268.

Sources and Uses of Cash

Net cash used in investing activities was $zero for both quarters. Net cash provided by financing activities was $101,149 and $(6,999), respectively, for the six months ended June 30, 2004 and 2003, respectively.

We are not generating sufficient cash flow from operations to cover our working capital expenses or to fund our growth. If we can successfully complete one or more capital raises, and one or more acquisitions of profitable businesses, then we anticipate that we can operate at a profitable level. Until such time, however, and in order to complete the acquisitions, we will need to raise additional capital through the sale of our equity securities. If we are unsuccessful in raising the required capital, we may have to curtail operations.

Critical Accounting Policies

The discussion and analysis of the Company’s financial condition and results of operations are based upon its consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. In consultation with its Board of Directors, the Company has identified accounting policies related to the valuation of stock issued for services that it believes are key to an understanding of its financial statements. These are important accounting policies that require management’s most difficult, subjective judgments.

19

ITEM 3Controls and Procedures

The Company’s Chief Executive Officer and Chief Financial Officer (or those persons performing similar functions), after evaluating the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934, as amended) as of a date within 90 days of the filing of this quarterly report (the “Evaluation Date”), have concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures were effective to ensure the timely collection, evaluation and disclosure of information relating to the Company that would potentially be subject to disclosure under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. There were no significant changes in the Company’s internal controls or in other factors that could significantly af fect the internal controls subsequent to the Evaluation Date.

20

PART II – OTHER INFORMATION

ITEM 1Legal Proceedings

In the ordinary course of business, we are from time to time involved in various pending or threatened legal actions. The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon our financial condition and/or results of operations. However, in the opinion of our management, matters currently pending or threatened against us are not expected to have a material adverse effect on our financial position or results of operations.

ITEM 2Changes in Securities and Use of Proceeds

On May 5, 2004, we issued 3,043,012 shares of common stock without restriction in accordance with Rule 144(k), to the holder of a warrant who exercised the warrant in full. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the shareholder was accredited.

On May 12, 2004, we issued 500,000 shares of common stock, restricted in accordance with Rule 144, to Byron Rambo, our secretary, for services rendered. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the shareholder was accredited.

On May 12, 2004, we issued 25,000 shares of common stock, restricted in accordance with Rule 144, to one of our franchisees. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the shareholder was a sophisticated investor.

On June 7, 2004, we approved the issuance of 500,000 shares of common stock, restricted in accordance with Rule 144, to Tim Murray for service rendered as a Director. The issuance was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933, and the shareholder was accredited.

ITEM 3Defaults Upon Senior Securities

There have been no events which are required to be reported under this Item.

ITEM 4Submission of Matters to a Vote of Security Holders

On June 25, 2004, we held our annual meeting of shareholders. Proxies were not solicited from the shareholders.

Five individuals were elected to our Board of Directors, namely John Martin, Byron Rambo, Michael D’Apolito, Harold Kestenbaum, and Tim Murray. Each of the individuals were directors prior to the meeting. The results of the voting were as follows:

					Broker
Director	Votes For	Votes Against	Votes Withheld	Abstentions	Non-Votes
John Martin	25,537,870	-0-	-0-	-0-	-0-
Byron Rambo	25,537,870	-0-	-0-	-0-	-0-
Michael D’Apolito	25,537,870	-0-	-0-	-0-	-0-
Harold Kestenbaum	25,537,870	-0-	-0-	-0-	-0-
Tim Murray	25,537,870	-0-	-0-	-0-	-0-

21

The other matters on which the shareholders voted, and the results of voting, were:

1.Approval of an amendment to our Articles of Incorporation to do three (3) things: (a) change the name of the Company to Beverly Hills Weight Loss and Wellness, Inc.; (b) effectuate a 3-for-1 forward stock split of the Company’s issued and outstanding common stock; and (c) increase the Company’s authorized common stock to 500,000,000 shares;

				Broker
Votes For	Votes Against	Votes Withheld	Abstentions	Non-Votes
25,537,870	-0-	-0-	-0-	-0-

2.Ratification of the appointment of Gately & Associates, LLC as independent auditors of the Company for the fiscal year ending December 31, 2004.

				Broker
Votes For	Votes Against	Votes Withheld	Abstentions	Non-Votes
25,537,870	-0-	-0-	-0-	-0-

A more detailed description of each agenda item at the annual shareholders meeting can be found in our Schedule 14C Information Statement dated and filed with the Securities and Exchange Commission on May 28, 2004

Subsequent to the 2004 Annual Shareholders Meeting, the Board of Directors voted to postpone the 3-for-1 forward stock split until a later date. Because the shareholders approved the forward stock split at the meeting, the Board of Directors will have the discretion to effectuate the split at the time of its choosing at a reasonable time in the future.

ITEM 5Other Information

Effective on July 8, 2004, we changed our name to Beverly Hills Weight Loss and Wellness, Inc.

22

 ITEM 6Exhibits and Reports on Form 8-K

(a)Exhibits

3.1 (1)	Articles of Incorporation of BNE Associates, Inc. dated May 9, 1996.
3.2 (1)	Certificate of Amendment of Articles of Incorporation dated May 5, 1998 changing our name to Occidental Rand Corporation, increasing our authorized common stock, and effecting a forward stock split.
3.3 (1)	Certificate of Amendment of Articles of Incorporation dated December 30, 1998 effecting a forward stock split.
3.4 (1)	Certificate of Amendment of Articles of Incorporation dated August 27, 1999 changing our name to youticket.com, inc. and increasing our authorized common stock.
3.5 (2)	Certificate of Amendment of Articles of Incorporation dated April 2001 increasing our authorized common stock and effecting a reverse stock split.
3.6 (2)	Restated Articles of Incorporation of youticket.com, inc. dated April 2001.
3.7 (3)	Certificate of Amendment of Articles of Incorporation dated March 2002 changing our name to Weight Loss Forever International, Inc.
3.8	Corrected Certificate of Amendment of Articles of Incorporation dated June 25, 2004
3.9 (1)	Bylaws of youticket.com, inc.
10.1	Assignment of Warrants dated April 28, 2004
10.2	Extension and Amendment of Warrant Agreement dated April 28, 2004
31.1	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
32.1	Chief Executive Officer Certification Pursuant to 18 USC, Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Chief Financial Officer Certification Pursuant to 18 USC, Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

23

(1)Incorporated by reference from our Form 10-SB filed with the Commission on December 30, 1999.

(2)Incorporated by reference from our Schedule 14C Information Statement filed with the Commission on May 11, 2001.

(3)Incorporated by reference from our Schedule 14C Information Statement filed with the Commission on March 1, 2002

(b)Reports on Form 8-K

On May 4, 2004, we filed an Item 5 Current Report on Form 8-K dated April 28, 2004 describing the issuance of 3,043,012 shares of our common stock as part of a settlement with a warrant holder.

24

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.

Dated: September 2, 2004	/s/ John Martin
	By:	John Martin
	Its:	President

 

Dated: September 7, 2004	/s/ Byron Rambo
	By:	Byron Rambo
	Its:	Chief Financial Officer

25