UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended March 31, 1998
[ ] Transition report under Section 13 or 15(d) of the Securities
Exchange Act of 1934 (No fee required) for the transition period from
____________________ to _____________________
Commission file number: Q-2549
BRIA COMMUNICATIONS CORPORATION
(Name of Small Business Issuer in Its Charter)
New Jersey 22-1644111
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
147-17 Newport Avenue, Neponsit, New York 11964
(Address of Principal Executive Offices) (Zip Code)
(718) 318-1535
(Issuer's Telephone Number, Including Area Code)
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes __ No XX
The number of shares outstanding of the issuer's common stock ($0.01 par value),
as of June 12, 1998 was 2,061,349.
Total Number of Sequentially Numbered Pages 7
Index to Exhibits on Page 7
1
TABLE OF CONTENTS
PART I
ITEM 1. FINANCIAL STATEMENTS..................................................3
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.............4
PART II
ITEM 5. OTHER INFORMATION.....................................................5
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K......................................5
SIGNATURES............................................................6
INDEX TO EXHIBITS.....................................................7
2
PART I
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ITEM 1. FINANCIAL STATEMENTS
- - --------------------------------------------------------------------------------
Unless otherwise indicated, the term "Company" refers to BRIA
Communications Corporation and its predecessors. Interim financial statements
including a balance sheet for the Company as of the fiscal quarter ended March
31, 1998 and statements of operations for the interim period up to the date of
such balance sheet and the comparable period of the preceding fiscal year are
attached hereto on Pages F-1 through F-7 and incorporated herein by this
reference.
[THIS SPACE HAS BEEN INTENTIONALLY LEFT BLANK]
3
BRIA COMMUNICATIONS CORPORATION
UNAUDITED BALANCE SHEET
March 31, 1998
ASSETS
CURRENT ASSETS: $ -
-------------
None -
-------------
Total Current Assets -
=============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Notes payable - officers and directors $ 72,818
Accounts payable 1,166,246
Other current liabilities 124,832
--------------
Total Current Liabilities 1,363,896
--------------
STOCKHOLDERS' EQUITY (DEFICIT):
Common stock:
Class A, $.001 par value; shares authorized, 10,000,000;
shares issued and outstanding, 1,591,349 $ 1,592
Class B, $.001 par value; shares authorized, 220,000;
shares issued and outstanding, 213,440 (convertible
into Class A shares) 213
Capital in excess of par value 7,961,755
Accumulated deficit (9,321,527)
Trade credits (5,929)
-------------
Total Stockholders' Equity (Deficit) ( 1,363,896)
-------------
Total Liabilities and Stockholders' Equity $ -
=============
See notes to unaudited financial statments
F-1
BRIA COMMUNICATIONS CORPORATION
UNAUDITEDSTATEMENTS OF OPERATIONS
Quarters Ended March 31, 1998 and 1997
1998 1997
------------- ----------
REVENUE $ - $ -
------------- ----------
COST AND EXPENSES:
General and administrative 31,741 104,721
Environmental cleanup costs - -
Interest 1,043 1,043
Loss on sale of investments - -
-------------- ----------
Total Cost and Expenses 32,784 105,764
-------------- ----------
NET LOSS $ (32,784) $ (105,764)
============== ==========
NET LOSS PER COMMON SHARE:
Net (loss) per common share $ (0.02) $ (0.18)
============== ==========
Weighted average number of common shares
outstanding 1,566,349 594,331
============== ==========
See notes to unaudited financial statements
F-2
BRIA COMMUNICATIONS CORPORATION
UNAUDITED STATEMENTS OF CASH FLOW
Quarters Ended March 31, 1998 and 1997
1998 1997
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (32,784) $ (105,764)
------------ -----------
Adjustments to reconcile net loss to net cash provided by operating activities:
Common stock issued for services 1,500 35,461
Increase (decrease) in accounts payable 31,284 70,270
------------ -----------
Total adjustments 32,784 105,731
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Net cash (used) by operating activities - (33)
------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of marketable securities - -
------------ -----------
Net cash used by investing activities - -
------------ -----------
NET INCREASE (DECREASE) IN CASH - (33)
Cash, beginning 33
------------ -----------
Cash, ending $ - $ -
============ ===========
SUPPLEMENTAL DISCLOSURES:
Interest expense $ 1,043 $ 1,043
============ ===========
Non cash financing activities:
Issuance of common stock for services $ 1,500 $ 35,467
============ ===========
See notes to unaudited financial statements
F-3
BRIA COMMUNICATIONS CORPORATION
UNAUDITED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
March 31, 1998
Total
Capital In Trade and Stockholders
Class A Class A Class B Class B Excess Of Accumulated Media Equity
Shares Amount Shares Amount Par Deficit Credits (Deficit)
---------- --------- ---------- --------- ----------- ------------- ----------- -------------
BALANCE
December 31, 1997 1,541,349 $ 1,542 213,440 $ 213 $ 7,960,305 $ (9,288,743) $ (5,929) $ (1,332,612)
Issued 50,000 50 1,450 1,500
Net income (loss) (32,784) (32,784)
---------- --------- ---------- ---------- ----------- ------------- ----------- ------------
BALANCE
March 31, 1998 1,591,349 $ 1,592 213,440 $ 213 $ 7,961,755 $ (9,321,527) $ (5,929) $ (1,363,896)
See notes to unaudited financial statements
F-4
BRIA COMMUNICATIONS CORPORATION
NOTES TO UNAUDITED FINANCIAL STATEMENTS
March 31, 1998 and 1997
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
The Company is located in the United States and previously marketed various
powdered metals which it either processed or sold without processing. The
Company ceased all active operations on June 30, 1994. Since then the Company's
activity has been largely restricted to maintaining its corporate legal status,
negotiating creditor settlements and searching for mergers or acquisitions.
Taxes on Income
Effective January 1, 1993 the Company adopted Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes. The cumulative effect of the
change in accounting principle is immaterial.
Net Income Per Share
Net income per share is based on the average number of shares outstanding during
each year retroactively adjusted to give effect to all stock splits.
Investment Securities
Available-for-sale securities are stated at fair value, unrealized holding gains
and losses and net of the related deferred tax effect are reported as a separate
component of stockholders' equity.
Basis of Financial Statement Presentation
The Company's financial statements have been presented on the basis that it is a
going concern, which contemplates the realization of assets and satisfaction of
liabilities in the normal course of business. The Company has sustained
recurring losses and at March 31, 1998 the stockholders' equity reflects a
deficit of $1,363,896. The Company's continued existence is dependent on its
ability to generate sufficient cash flow to cover operating expenses, settle its
obligations and develop an active business.
NOTE 2 - NOTES PAYABLE - OFFICERS AND DIRECTORS
Notes payable to officers and directors consists of the following:
F-5
BRIA COMMUNICATIONS CORPORATION
NOTES TO UNAUDITED FINANCIAL STATEMENTS (CONTINUED)
March 31, 1998 and 1997
December 31,
1997
Note payable, with interest at 8% $ 51,243
Note payable, with interest at 8.5% 21,575
---------------
$ 72,818
===============
At March 31, 1998, the above notes payable to officers and directors were in
default.
NOTE 3 - COMMON STOCK
During 1997, the Board of Directors approved a 1 for 20 reverse stock split of
the Class A common stock and a decrease in the authorized number of shares of
Class A common stock from 200,000,000 to 10,000,000 shares. The par value of
$.001 was unchanged. The details of the Company's Common Stock at March 31, 1998
are as follows:
Number of Shares
Class A, $.001 par value;
Authorized 10,000,000
Issued and outstanding 1,591,349
Class B, $.001 par value;
Authorized 220,000
Issued and outstanding 213,440
Class B shares are convertible into Class A shares on an eight hundred-for-one
basis and each class has the same rights and privileges with the exception of
voting.
On May 8, 1996, a Stock Exchange Agreement between the Company and AltaChem was
rescinded by all parties retroactive to its inception on December 3, 1995.
Pursuant to the cancellation agreement, all shares of common stock previously
exchanged are to be returned. At March 31, 1998, 18,749,796 (937,490 post 20 for
1 split) shares of the Company's Class A common stock had not been returned. The
Company has notified its stock transfer agent that these shares are not
outstanding and are to be canceled upon receipt of the certificate, accordingly,
a stop transaction order has been placed on the shares by the agent. These
shares are not included in the total of outstanding shares in the financial
statements.
NOTE 4 - BASIS OF PRESENTATION
The accompanying consolidated unaudited condensed financial statements have been
prepared by
F-6
BRIA COMMUNICATIONS CORPORATION
NOTES TO UNAUDITED FINANCIAL STATEMENTS (CONTINUED)
March 31, 1998 and 1997
management in accordance with the instructions in form 10-QSB and, therefore, do
not include all information and footnotes required by generally accepted
accounting principles and should, therefore, be read in conjunction with the
company's Annual Report to Shareholders on Form 10-KSB for the fiscal year ended
December 31, 1997. These statements do include all normal recurring adjustments
which the Company believes necessary for a fair presentation of the statements.
The interim operations results are not necessarily indicative of the results for
the full year ended December 31, 1998.
NOTE 5 - ADDITIONAL FOOTNOTES INCLUDED BY REFERENCE
There have been no material changes in the information disclosed in the notes to
the financial statements included in the Company's Annual Report on Form 10-KSB
for the year ended December 31, 1997. Therefore, those footnotes are included
herein by reference.
F-7
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
- - --------------------------------------------------------------------------------
BRIA Communications Corporation, a New Jersey corporation hereafter
referred to as the "Company," was originally involved in the repair of aircraft
turbines and engine components and the purchasing, processing and selling of
special refractory metals. All active operations in such industries ceased in
June 1994, an event that significantly affected the Company's performance. The
Company then changed its focus to searching for suitable merger or acquisition
candidates. Since the Company changed its focus to searching for a suitable
merger or acquisition candidate, the Company has entered into several agreements
to acquire other companies. All of these acquisitions have failed.
However, on April 16, 1998, the Company entered into an Agreement to
purchase a 100% interest in AmViet Development Corporation, a Bahamian
Corporation ("AVDC") from International Beverage Development Corporation, a
Delaware Corporation. (the "Agreement"). AVDC has represented that it is the
owner of a license issued by the Vietnamese government which allows AVDC to act
as a joint venture partner with Quang Tri Beer Factor, a Vietnamese partner.
Pursuant to the licensing arrangement, AVDC owns a 70% interest in the AmViet
Mineral Water Company which is license to produce water, mineral water and other
beverages in Vietnam. Quang Tri Beer Factory owns the other 30% of AmViet
Mineral Water for which it contributed the plant and land. As of the signing of
the Agreement the plant was unfinished, but was scheduled to begin production in
approximately 60 days. As of June 12, 1998, AVDC represented that the plant
should be ready for production on or around June 30, 1998.
ADVC also is a licensee of the Monarch Beverage Company in Vietnam. The
Monarch license enables AVDC to sell the Monarch franchise products such as
America Cola, Dad's Rootbeer, Kikapoo Joy Juice, and Bubble Up in Vietnam. If
the Company successfully acquires AVDC it will have an indirect ownership
interest in the land, buildings, equipment, water rights, any accrued goodwill,
customer lists and accounts receivables. The Company anticipates the closing to
occur on July 7, 1998. However, the Company is still in the due diligence phase
and closing will be subject to a satisfactory review of AVDC by the Company and
review of the Company by International Beverage Development Corporation.
Plan of Operation
The Company's current plans include completion of it due diligence in
the tentatively scheduled closing on the acquisition of AVDC. In the event the
acquisition fails, the Company will continue to search for appropriate business
opportunities, including businesses which the Company can acquire as operating
subsidiaries. The Company's goal is to acquire assets which will provide the
Company with revenues.
In the Company's quest for business opportunities, the Company has
employed the services of Canton Financial Services Corporation, a Nevada
corporation and a wholly owned subsidiary of the Company, ("CFS"). CFS provides
business services to the Company including, administrative, accounting, and
shareholder relations work. CFS was originally retained in May 1995 pursuant to
a Consulting Agreement. CFS is currently rendering services to the Company. The
terms and amount of payments will be negotiated upon the Company acquiring or
merging with an operating or a potentially viable business.
Results of Operations
The Company had no significant operations during the first quarter of
1998. The operations of the Company have consisted primarily of maintaining its
corporate form, filing its public reports with the Securities & Exchange
Commission and attempting to settle past debts through the issuance of common
stock.
4
The General and administrative expenses decreased by $72,980 from $104,721
during the quarter ending March 31, 1997, to $31,741 during the quarter ending
March 31, 1998. This decrease was due primarily to a significant decrease in
consulting expenses paid to outside consultants.
Capital Resources and Liquidity
The Company has no current assets and no cash reserves. The Company has
issued shares of its common stock to creditors to cover some of its expenses and
issued common stock at heavy discounts for limited amounts of cash. In addition,
CFS has advanced limited amounts of cash to pay for expenses related to
maintaining the Company's corporate form.
PART II
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ITEM 5. OTHER INFORMATION
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Subsequent to the end of the quarter ended March 31, 1998, the Company
issued a total of 570,000 shares of its Class A common stock for consulting
services: (1) 190,000 shares were issued to the Company's president, Richard
Lifschutz; (2) 70,000 shares were issued to the Company's secretary/treasurer,
Isaac Lifschutz; (3) 150,000 shares were issued to A-Z Professional Consultants,
Inc.; (4) 150,000 shares were issued to CFS; and (5) 10,000 shares were issued
for legal services.
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
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(a) Index to Exhibits. Exhibits required to be attached by Item 601 of
Regulation S-B are listed in the Index to Exhibits beginning on page 7
of this Form 10-QSB, which is herein incorporated by reference.
(b) Reports on Form 8-K. The Company did not file any reports on Form 8-K
during the period for which this report is being filed.
5
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized, this 15th day of June 1998.
BRIA Communications Corporation
/s/ Richard Lifschutz
Richard Lifschutz
In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.
Signature Title Date
/s/ Richard Lifschutz President and Director June 15, 1998
- - ----------------------------
Richard Lifschutz
/s/ Isaac Lifschutz Treasurer, Secretary June 15, 1998
- - ------------------------------- and Director
Isaac Lifschutz
6
INDEX TO EXHIBITS
EXHIBIT DESCRIPTION
NUMBER
3(a) * Articles of Incorporation of the Company, filed as
Exhibit 3(i) to * Registrant's Registration Statement on
Form S-4 filed June 2, 1990, as amended.
3(b) * Bylaws of the Company, filed as Exhibit 3(ii) to
Registrant's Registration * Statement on Form S-4 filed
June 2, 1990, as amended.
10(i)(a) 8 Agreement to Acquire AmViet Development Corporation
between the Company and International Beverage
Development Corporation dated April 16, 1998, with
Addendums.
* Incorporated herein by reference from the Company's Form 10-KSB filed
with the Commission on August 23, 1994.
7