U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: September 30, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE EXCHANGE ACT
For the transition period from: to:
Commission file number: 33-26899-D
BEST OF AMERICA CORPORATION
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(Exact Name of Registrant as specified in its charter)
COLORADO 84-1082394
- -------------------------------- ----------------------
(State or other jurisdiction (IRS Employer Identi-
of incorporation or organization fication Number)
6748 Renoir
Baton Rouge, Louisiana 70816
---------------------------------------------
(Address code of principal executive offices)
(504) 926-0596
---------------------------
(Issuer's telephone number)
Check mark whether the Issuer (1) has filed all reports required by
Section 13 or 15(d) of the Exchange Act 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 the filing
requirements for at least the past 90 days. YES: __X__ NO: _____
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PREVIOUS 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 the
court. YES: _____ NO: _____
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuers
classes of common stock, as of the last practicable date: 8,731,000
Transitional Small Business Disclosure Format. YES: _____ NO:__X__
BEST OF AMERICA CORPORATION
Index
PART I FINANCIAL INFORMATION
Balance Sheet
September 30, 1998 3
Statements of Operations
Nine Months
Ended September 30, 1998 and 1997 4
Statements of Cash Flows
Nine Months Ended
September 30, 1998 and 1997 5
Notes to Financial Statements 6
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 7-8
PART II
Other Information 9
Signatures 10
2
Best of America Corporation
Balance Sheet
September 30, 1998
(Unaudited)
ASSETS
Current assets:
Cash $ 1,746
Accounts receivable, net of allowance for
doubtful accounts of $ 0 3,655
Inventory 14,161
Note receivable - trade 27,743
Contract receivable 48,925
Prepaid expenses 181
------------
Total current assets 96,411
Property and equipment, at cost, net of
accumulated depreciation of $32,857 4,532
Land 469,151
Patents and formulas, at cost, net of
accumulated amortization of $6,791 3,296
Deposits 25,215
------------
$ 598,605
============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 340,816
Due to related parties 13,136
Note payable-current portion 13,313
Customer deposits 10,000
------------
Total current liabilities 377,265
Note payable-net of current portion 30,183
Commitments and contingencies
Stockholders' equity:
Preferred stock, $10 par value, non-voting,
non-cumulative, non participating,
convertible, 50,000,000 shares authorized
216,200 shares issued and outstanding 2,162,000
Discount below par on preferred stock (1,732,532)
Common stock, no par value,
1,000,000,000 shares authorized,
8,731,000 shares issued and outstanding 446,930
Paid in capital 26,647
Accumulated deficit (711,888)
------------
191,157
------------
$ 598,605
============
See accompanying notes to financial statements.
3
Best of America Corporation
Statements of Operations
For the Three and Nine Months Ended September 30, 1998 and 1997
(Unaudited)
Nine Months Three Months
---------------------------------- ---------------------------------
1998 1997 1998 1997
------------ ------------ ------------ -------------
Sales $ 55,091 $ 79,599 $ 16,782 $ 23,206
Cost of sales 20,536 41,840 2,829 10,556
------------ ------------ ------------ -------------
Gross margin 34,555 37,759 13,953 12,650
General and administrative expenses 208,873 138,194 50,731 55,401
------------ ------------ ------------ -------------
Income (loss) from operations (174,318) (100,435) (36,778) (42,751)
Other income and (expense):
Miscellaneous income 1,052 9 0 1
Interest expense (33,167) (25,121) (5,897) (9,697)
Intercompany write-off 125,596 0 125,596 0
------------ ------------ ------------ -------------
93,481 (25,112) 119,699 (9,696)
------------ ------------ ------------ -------------
Net income (loss) $ (80,837) $ (125,547) $ 82,921 $ (52,447)
============ ============ ============ =============
Basic (loss) per share ($0.01) ($0.02) $0.01 ($0.01)
============ ============ ============ =============
Weighted average shares outstanding 9,440,558 8,129,000 9,063,667 8,129,000
============ ============ ============ =============
See accompanying notes to financial statements.
4
Best of America Corporation
Statement of Cash Flows
For the Three and Nine Months Ended September 30, 1998 and 1997
(Unaudited)
Nine Months Three Months
------------------------------- --------------------------
1998 1997 1998 1997
----------- ---------- --------- ---------
Net cash provided by (used in) operating activities $ (175,109) $ (88,479) $ (6,955) $ 34,040
Cash flows from investing activities:
Note receivable - trade issued (500) 0 0 0
(Acquisition)sale of office equipment 4,269 (1,293) 0 0
Acquisition of option on real estate 0 (4,000) 0 (1,000)
----------- ---------- --------- ---------
Net cash (used in) investing activities 3,769 (5,293) 0 (1,000)
Cash flows from financing activities:
Proceeds from (payments to) related parties 71,641 47,043 6,503 (29,030)
Proceeds from note payable 2,976 0 992 0
Common stock issued for cash 96,000 0 0 0
----------- ---------- --------- ---------
Net cash provided by financing activities 170,617 47,043 7,495 (29,030)
----------- ---------- --------- ---------
Increase (decrease) in cash (723) (46,729) 540 4,010
Cash and cash equivalents,
beginning of period 2,469 51,437 1,206 698
----------- ---------- --------- ---------
Cash and cash equivalents,
end of period $ 1,746 $ 4,708 $ 1,746 $ 4,708
=========== ========== ========= =========
See accompanying notes to financial statements.
5
Best of America Corporation
Notes to Financial Statements
The accompanying condensed unaudited financial statements have been
prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to form
10-QSB. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring adjustments) considered
necessary for a fair presentation have been included. The results of
operations for the periods presented are not necessarily indicative
of the results to be expected for the full year. The accompanying
financial statements should be read in conjunction with the Company's
form 10-KSB filed for the year ended December 31, 1997.
Basic (loss) per share was computed using the weighted average number
of common shares outstanding.
BASIS OF PRESENTATION
The accompanying financial statements have been prepared on a "going
concern" basis which contemplates the realization of assets and the
liquidation of liabilities in the ordinary course of business.
The Company has incurred operating losses during the nine months
ended September 30, 1998, and 1997, aggregating $80,837 and $125,547,
and has negative working capital of $280,854 at September 30, 1998.
During the periods presented, the Company has not generated positive
cash flow from operations and there can be no assurance that the
trend will not continue. Profitable operations are dependent upon,
among other factors, the Company's ability to obtain equity or debt
financing.
The Company is unable to project a level of revenue which would allow
a reversal of its history of operating losses in the near future. The
Company's continued operations are dependent upon its ability to
restructure its existing debt and to obtaining financing.
6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Trends and Uncertainties: The Company has tried to eliminate the
major variables of interest rates and operating expenses.
Capital and Sources of Liquidity: During the nine months ended
September 30, 1998 the Company's principal source of funding was
derived from operations, loans from shareholders and proceeds from
the sale of common stock.
The Company currently has no material commitments for capital
expenditures. The Company recently terminated its office lease which
the Company had previously been leasing at a base rental of $1,200
per month. The Company leases 400 square feet of storage space for
its parts and chemicals on a month to month basis for a monthly rent
of $110.
The Company received proceeds from the sale of office equipment of
$5,731, purchased office equipment of $1,462 and paid $500 for a
trade note receivable during the nine months ended September 30,
1998, resulting in net cash provided by investing activities of
$3,769.
The Company purchased office equipment of $1,293 and acquired options
on real estate for $4,000 during the nine months ended September 30,
1997, resulting in net cash used in investing activities of $5,293.
The Company received advances from shareholders of $71,641, proceeds
from the sale of common stock of $96,000, and proceeds from a note
payable of $2,976 during the nine months ended September 30, 1998,
resulting in net cash provided by financing activities of $170,617.
The Company received advances from shareholders of $47,043 during the
nine months ended September 30, 1997, resulting in net cash provided
by financing activities of $47,043.
7
Results of Operations:
The Company has not generated positive cash flow from operations and
there can be no assurance that the trend will not continue.
The Company is unable to project a level of revenue which would allow
a reversal of its history of operating losses in the near future. In
this regard, the Company is attempting to restructure its existing
debt.
1998 Compared to 1997: For the nine months ended September 30, 1998,
the Company experienced a net loss of $80,837 compared to a net loss
of $125,547 for the nine months ended September 30, 1997. The Company
experienced negative cash flow from operations of $175,109 for the
nine months ended September 30, 1998 compared to negative cash flow
from operations of $88,479 for the nine months ended September 30,
1997.
The Company received revenue of $55,091 for the nine months ended
September 30, 1998, compared to $79,599 for the nine months ended
September 30, 1997.
Cost of sales decreased from $41,840 during the nine months ended
September 30, 1997, to $20,536 during the nine months ended September
30, 1998, due to decreased merchandise sales.
General and administrative expenses increased from $138,194 during
the nine months ended September 30, 1997, to $208,873 during the nine
months ended September 30, 1998, due to more money spent to acquire
financing.
The Company's interest expense increased from $25,121 during the nine
months ended September 30, 1997, to $33,167 during the nine months
ended September 30, 1998.
8
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Not applicable.
ITEM 2. CHANGES IN SECURITIES.
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 5. OTHER INFORMATION.
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibit 27 - Finanical Data Schedule.
(b) Not applicable.
9
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
Best of America Corporation
(Registrant)
Dated: November 23, 1998
By: /s/ Edwin Cantin
____________________________
Edwin Cantin, President
10