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, 2002
[ ] TRANSITION REPORT UNDER SECTION 14 OR 15(D) OF THE EXCHANGE ACT
For the transition period from__________ to ___________
BIO-ONE CORPORATION
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(Name of Registrant as specified in its charter)
NEVADA 000-31889 65-0815746
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(State or other jurisdiction of (Commission File (IRS Employer
incorporation or organization) No.) Identification No.)
1630 Winter Springs Blvd., Winter Springs, Florida 32708 (407) 977-1005
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(Address and telephone number of principal executive offices)
Check whether the issuer has (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months, (or such
shorter period that the Registrant was required to file such report(s), and (2)
has been subject to such filing requirements for the past 90 days.
Yes (X) 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: June 30, 2002
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CLASS Outstanding at June 30, 2002
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Common Stock $.001 par value 12,834,760
Copies of communications sent to:
Newman, Pollock & Klein, LLP
2101 NW Corporate Boulevard
Suite 414
Boca Raton, Florida 33431
BIO-ONE CORPORATION
INDEX
Page
Number
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PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets
June 30, 2002 (Unaudited)
and December 31, 2001 3-4
Statements of Operations
Three months and six months ended
June 30, 2002 (Unaudited) and
June 30, 2001 (Unaudited) 5
Statements of Cash Flows
Six months ended
June 30, 2002 (Unaudited) and
June 30, 2001 (Unaudited) 6
Notes to Financial Statements (Unaudited) 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II. OTHER INFORMATION
BIO-ONE CORPORATION
BALANCE SHEETS
ASSETS
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JUNE 30, 2002 DECEMBER 31,
(UNAUDITED) 2001
------------- ------------
Current assets:
Cash and cash equivalents $ 353 34,103
Accounts receivable -- 1,672
Inventories -- 15,153
------ ------
Total current assets 353 50,928
Property and equipment, at cost, net of accumulated
depreciation and amortization 6,604 18,242
Deposits 2,150 1,700
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Total assets $9,107 70,870
====== ======
See accompanying notes to financial statements.
3
BIO-ONE CORPORATION
BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
JUNE 30, 2002 DECEMBER 31,
(UNAUDITED) 2001
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Current liabilities:
Accounts payable $ 129,103 16,037
Accrued expenses 161,949 202,642
Current installments of note payable 89,502 74,502
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Total current liabilities 380,554 293,181
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Shareholders' equity:
Common stock - $.001 par value, authorized
100 million shares; issued 12,812,086 shares 12,812 12,812
Additional paid in capital 1,030,988 1,030,988
Treasury stock, 1,750,000 shares (1,750) -
Accumulated deficit (1,413,497) (1,266,111)
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Total shareholders' equity (371,447) (222,311)
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$ 9,107 70,870
============ ============
See accompanying notes to financial statements.
4
BIO-ONE CORPORATION
STATEMENTS OF OPERATIONS
Three Months Ended Six Months Ended
June 30, June 30,
2002 2001 2002 2001
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
------------ ------------ ------------ ------------
Revenues:
Net sales $ 1,500 23,077 22,220 35,867
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1,500 23,077 22,220 35,867
Costs and expenses:
Cost of goods sold 434 13,573 9,343 20,457
Selling, general and administrative 142,771 112,163 305,509 212,496
------------ ------------ ------------ ------------
143,205 125,736 314,852 232,953
------------ ------------ ------------ ------------
Operating income (loss) (141,705) (102,659) (292,632) (197,086)
Non-operating revenue (expense):
Other Income 146996 -- 146996 --
Interest expense (590) (2,060) (1,750) (5,829)
------------ ------------ ------------ ------------
Income before income taxes 4,701 (104,719) (147,386) (202,915)
Provision for income taxes -- -- -- --
------------ ------------ ------------ ------------
Net income (loss) $ 4,701 (104,719) (147,386) (202,915)
============ ============ ============ ============
Basic earnings per share $ -- (0.01) (0.01) (0.02)
============ ============ ============ ============
Diluted earnings per share $ -- (0.01) (0.01) (0.02)
============ ============ ============ ============
Weighted average number of shares outstanding 12,812,086 10,369,499 12,812,086 10,244,499
============ ============ ============ ============
See accompanying notes to financial statements.
5
BIO-ONE CORPORATION
STATEMENTS OF CASH FLOWS
Six Months Ended
June 30,
2002 2001
(UNAUDITED) (UNAUDITED)
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Cash flows from operating activities:
Net loss $(147,386) (202,915)
Adjustments to reconcile net income to net cash
provide by operating activities:
Depreciation and amortization 1,000 2,000
Common stock issued for services -- 3,000
Changes in operating assets and liabilities:
Accounts receivable 1,672 (1,472)
Inventories 15,153 1,018
Accounts payable and accrued expenses 83,011 37,981
Other assets (450) --
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Net cash used in operating activities (47,000) (160,388)
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Cash flows from investing activities:
Purchase of property and equipment -- (11,013)
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Net cash used in investing activities -- (11,013)
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Cash flows from financing activities:
Purchase of treasury stock (1,750)
Proceeds from sale of common stock -- 150,000
Payment of principal on note payable -- (25,000)
Proceeds from note payable 15,000 75,000
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Net cash provided by financing activities 13,250 200,000
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(Decrease) increase in cash and cash equivalents (33,750) 28,599
Cash and cash equivalents - beginning of period 34,103 19,832
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Cash and cash equivalents - end of period $ 353 48,431
========= =========
See accompanying notes to financial statements.
6
BIO-ONE CORPORATION
NOTES TO FINANCIAL STATEMENTS
(1) PRESENTATION OF UNAUDITED FINANCIAL STATEMENTS
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The unaudited financial statements have been prepared in accordance
with rules of the Securities and Exchange Commission and, therefore, do
not include all information and footnotes necessary for a fair
presentation of financial position, results of operations and cash
flows, in conformity with generally accepted accounting principles. The
information furnished, in the opinion of management, reflects all
adjustments (consisting only of normal recurring accruals) necessary to
present fairly the financial position as of June 30, 2002, and results
of operations and cash flows for the six-month periods ended June 30,
2002 and 2001. The results of operations are not necessarily indicative
of results which may be expected for any other interim period, or for
the year as a whole.
(2) SALES TO MAJOR CUSTOMERS
------------------------
During the six months ended June 30, 2002, two customers accounted for
52% and 26% of total revenue.
During the six months ended June 30, 2001, three customers accounted
for 51%, 19% and 17%, respectively, of total revenue.
(3) INVENTORIES
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Inventories consist of the following:
DECEMBER 31, JUNE 30, 2002
2001 (UNAUDITED)
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Finished goods $15,153 --
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with our
financial statements and the accompanying notes. The discussion and analysis
contains forward-looking statements, which involve risks and uncertainties.
These forward-looking statements may be impacted, either positively or
negatively, by various factors. Our actual results may differ significantly from
the results, expectations and plans discussed. This Report contains "forward
looking statements" relating to our company's current expectations and beliefs.
These include statements concerning operations, performance, financial
condition, anticipated acquisitions and anticipated growth. Without limiting the
generality of the foregoing, words such as "may", "will", "would", "expect",
"believe", "anticipate", "intend", "could", "estimate", or "continue", or the
negative or other variation thereof or comparable terminology are intended to
identify forward-looking statements. These statements by their nature involve
substantial risks and uncertainties, which are beyond our company's control.
Should one or more of these risks or uncertainties materialize or should our
company's underlying assumptions prove incorrect, actual outcomes and results
could differ materially from those indicated in the forward- looking statements.
Bio-One Corporation will serve the emerging niche market of preventive and
alternative healthcare. This niche has grown to a multi-billion dollar
nutritional supplement based marketplace. The market is considered to be global.
We will pursue a strategy of consolidation through vertical integration mergers
and marketing/distribution acquisitions in Florida and the Southeast region of
the United States.. Our principle goal will be to acquire and operate at least
one high-level manufacturing business and several marketing companies that fit
the strict criteria we established. Management believes that the nutritional
supplement market is ripe for selective consolidation. We are in the process of
assembling the management team with the requisite experience to lead this growth
and in furtherance thereof have taken the following actions:
1) We entered into an Agreement with Kevin Lockhart, the Company's former
secretary and director, wherein Mr. Lockhart resigned as an officer,
director, and employee of Bio-One Corporation, effective June 30, 2002.
Mr. Lockhart returned to the treasury 1,750,000 shares of the stock he
previously held and forgave back pay totaling $173,000. In return he
received certain assets, valued at $5,000, from the Bio-One
Corporation's wholly owned subsidiary Crown Enterprises, Inc.
2) Armand Dauplaise, our President, loaned us $15,000 for working capital.
The loan is repayable on demand with interest due on the outstanding
principal balance of 5% per annum.
3) We signed an agreement with Cornell Capital Partners, LP to provide up
to $10 million in funding for the Company. A more detailed description
of this transaction is set forth under "Subsequent Events."
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REVENUES AND EXPENSES FOR THE THREE MONTHS ENDED JUNE 30, 2002 AS COMPARED TO
THE THREE MONTHS ENDED JUNE 30, 2001
While our revenues decreased from $23,077 to $1,500, our operating loss
decreased from $104,719 to a gain of $4,701. This was due primarily to the
Lockhart Agreement and a significant decrease in our selling, general and
administrative expenses. We incurred a net profit of $4,701 as compared to a net
loss of $104,719 for the same quarter in 2001.
LIQUIDITY AND CAPITAL RESOURCES
Our current assets declined from $23,089 as of March 31, 2002 to $353 as of June
30, 2002. Our total assets declined from $42,031 to $9,107. The primary reason
for this decline is attributable to the Lockhart Agreement. Total liabilities
decreased from $417,428 to $380,554 due primarily to the Lockhart Agreement.
Management remains focused on implementing the Bio-One business plan. The
Company plans to expand by acquiring other companies and using a combination of
cash, notes and our common stock to finance the future acquisitions. For
additional information, please see the section on "Subsequent Events."
SUBSEQUENT EVENTS
On July 25, 2002, Bio-One Corporation signed an agreement with Cornell Capital
Partners, LP for a $10,000,000 Equity Line of Credit investment. Cornell Capital
is a domestic hedge fund, which makes investments in, small-to-mid-sized
publicly traded companies. Under the Equity Line Agreement, Bio-One has the
right, but not the obligation to require Cornell Capital to purchase shares of
Bio-One common stock up to a maximum amount of $10,000,000 over a 24-month
period. There is no minimum draw down although Bio-One may make draws, as
provided below, during the term of the Equity Line. Pursuant to terms of the
Equity Line Agreement, Bio-One is required to file with the SEC a registration
statement covering the shares to be acquired by Cornell Capital. The 24-month
term commences upon the effective date of the registration statement. The
purchase price of the shares will be 100% of the lowest closing bid price of
Bio-One common stock during the six consecutive trading days immediately
following receipt of the Company's notice of its intent to make an Equity Line
draw, which notice may be withdrawn by the Company. Bio-One paid Cornell Capital
a one-time fee equal to $350,000, payable in 1,478,261 shares of restricted
common stock. Cornell Capital is entitled to retain 5% of each Equity Line
advance. The application of these funds will enable management to accelerate the
launch of the Bio-One merger strategy.
On July 22, 2002, Armand Dauplaise, our President, entered into a personal loan
agreement with an unaffiliated third party to borrow $150,000. As security for
the loan he pledged 1,500,000 shares of his restricted common stock in Bio. Upon
receipt of the loan proceeds, Mr. Dauplaise will loan the funds to the Company
under the same terms and conditions as set forth in his loan agreement.
Management believes that these funds will provide adequate working capital for
Bio-One prior to commencing the Cornell Capital Equity Line draw down.
9
PART 11. OTHER INFORMATION
Item 1. Legal Proceedings
On or about July 10, 2002, a complaint was filed by Kevin Lockhart against
Bio-One Corporation and Armand Dauplaise. The matter was settled and dismissed
on July 24, 2002.
Item 2. Change in Securities
Following is a list of our securities that we have issued during the last
quarter.
Name Date Acquired Number of Shares Consideration
----------------- ------------- ---------------- -------------
Irwin Newman 04/02 20,484 Consulting (1)
Jeffrey Gerstein 04/02 2,276 Consulting (1)
We relied upon Section 4(2) of the Securities Act of 1933, as amended (the
"Act") and Rule 506 of Regulation D promulgated thereunder for the issuance
of our common stock.
We have not issued any additional shares of our common stock during the
quarter ended June 30, 2002.
Item 3. Defaults Upon Senior Securities
We have not issued any senior securities and as such there have been no
defaults.
Item 4. Submission of Matters to a Vote of Security Holders
We have not submitted any matters to a vote of our security holders, whether
through proxy or otherwise, during the quarter ended June 30, 2002.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
10.1 Cornell Capital Partners, LP Equity Line of Credit
99.1 Financial Certification
(b) Reports on Form 8-K
None
10
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
REGISTRANT:
BIO-ONE CORPORATION
/s/ Armand Dauplaise
- -------------------------------
By: Armand Dauplaise, President
Dated: August 13, 2002
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