UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of the Securities and Exchange Act of 1934
For the Quarter Ended: Commission File Number
April 30, 2001 0-30653
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BOOK CORPORATION OF AMERICA
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(Name of small business issuer in its chapter)
Utah 87-0375228
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(State or other jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
4894 Mt. Elbrus Drive, San Diego, California 92117
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code (858) 565-1073
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Securities registered pursuant to section 12(b) of the Exchange Act: None
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
report(s), and (2) has been subject to such filing requirements for the
past 90 days. (1) Yes [ ] No [X]
State the number of shares outstanding of each of the registrants classes
of common equity, as of the latest practicable date:
As of April 30, 2001, issuer had 2,349,540 shares of its $.005 par value
common stock outstanding.
This Form 10-QSB contains certain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995, which
act contains a safe harbor for forward looking statements. The Company
believes that investors would be benefitted by the cautionary language
included in this paragraph. For this purpose any statements contained in
this Form 10-QSB that are not statements of historical fact may be deemed
to be forward-looking statements. Without limiting the foregoing, words
such as "may," "will," "expect," "believe," "anticipate," "estimate," or
"continue" or comparable terminology are intended to identify forward-
looking statements. These statements by their nature involve substantial
risks and uncertainties, and actual results may differ materially depending
on a variety of factors, many of which are not within the Company's
control. These factors include but are not limited to economic conditions
generally and in the industries in which the Company may participate;
competition within the Company's chosen industry, including competition
from much larger competitors; technological advances and failure by the
Company to successfully develop business relationships.
PART I FINANCIAL INFORMATION
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Item 1 Financial Statements
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Condensed Balance Sheet as of April 30, 2001
and October 31, 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Unaudited Condensed Statement of Operations for
the three and six months ended April 30, 2001 and 2000 . . . . . . . . . . 4
Unaudited Condensed Statement of Cash Flows for
the three and six months ended April 30, 2001 and 2000 . . . . . . . . . . 5
Selected Notes to Unaudited Financial Statements . . . . . . . . . . . . . . 6
2
Book Corporation of America
(A Development Stage Company)
Balance Sheet
April 30, 2001 (Unaudited) and October 31, 2000
April October
30, 2001 31, 2000
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(Unaudited)
Assets
Current Assets $ - $ -
- -------------- ----------- -----------
Total Current Assets $ - $ -
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Liabilities & Stockholders' Equity
Current Liabilities
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Accounts Payable $ 21,409 $ 16,107
Taxes Payable 200 200
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Total Current Liabilities 21,609 16,307
Stockholders' Equity
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Common Stock Authorized 100,000,000 Shares,
$0.005 Par Value; 2,349,540 Shares Issued &
Outstanding 11,748 11,748
Paid In Capital 3,041,711 3,041,711
Deficit in Retained Earnings (3,075,068) (3,069,766)
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Total Stockholders' Equity (21,609) (16,307)
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Total Liabilities &
Stockholders' Equity $ - $ -
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See Accompanying Notes
3
Book Corporation of America
(A Development Stage Company)
Statements of Operations (Unaudited)
For the Three Months Ended
and the Six Months Ended April 30
For the Three Months For the Six Months
Ended April 30 Ended April 30,
2001 2000 2001 2000
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Revenues $ - $ - $ - $ -
- -------- --------- --------- --------- ---------
Expenses
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Administrative Expenses $ 3,488 $ 3,611 $ 5,302 $ 3,611
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Net Loss $ (3,488) $ (3,611) $ (5,302) $ (3,611)
========= ========= ========= =========
Net Loss Per Share of
Common Stock $ (0.00) $ (0.00) $ (0.00) $ (0.00)
Weighted Average Number
Of Shares Outstanding
During Period 2,349,540 2,349,540 2,349,540 2,349,540
See Accompanying Notes
4
Book Corporation of America
(A Development Stage Company)
Statement of Cash Flows (Unaudited)
For the Six Months Ended April 30
2001 2000
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Cash Flows from Operating Expenses
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Net (Loss) $(3,488) $(3,611)
Adjustments to Reconcile Net Loss to
Increase in Accounts Payable 3,488 3,611
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Net Cash (Used) by Operating Expenses - -
Cash Flows from Investing Activities
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Net Cash Flows from
Investing Activities - -
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Cash Flows from Financing Activities
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Net Cash Provided (Used) by
Financing Activities - -
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Increase (Decrease) in Cash - -
Cash at Beginning of Period - -
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Cash at End of Period $ - $ -
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Disclosures for Operating Activities
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Interest $ - $ -
Taxes - -
See Accompanying Notes
5
Book Corporation of America
(A Development Stage Company)
Notes to Financial Statements
NOTE #1 - Organization
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The Company was incorporated under the laws of the state of Utah on
November 22, 1978. The Company amended its Articles of Incorporation,
authorizing 100,000,000 shares of common stock having a par value of
$0.005 per share.
The Articles of Incorporation grants the Company unlimited power to
engage in and to do any lawful act concerning any and all lawful
businesses for which corporations may be organized. The Company
currently seeks to license films to television and to engage in
market-by-market exploitation of the films it holds in its film
inventory.
In accordance with FASB 7 the Company is considered to be a
development stage company.
NOTE #2 - Significant Accounting Policies
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A. The Company uses the accrual method of accounting.
B. Revenues and directly related expenses are recognized in the
period in which the sales are finalized with customers.
C. The Company considers all short term, highly liquid investments,
that are readily convertible to known amounts within ninety days
as cash equivalents. The Company currently has no cash
equivalents.
D. Basic Earnings Per Shares are computed by dividing income
available to common stockholders by the weighted average number
of common shares outstanding during the period. Diluted Earnings
Per Share shall be computed by including contingently issuable
shares with the weighted average shares outstanding during the
period. When inclusion of the contingently issuable shares would
have an antidilutive effect upon earnings per share no diluted
earnings per share shall be presented.
E. As a licensor of films to television or other markets the Company
shall recognize revenues on the dates of the exhibition for both
percentage and flat fee engagements. Revenues from license
agreements that meet the requirements of FASB 53 shall be
recognized when the license period begins.
F. Costs to produce a film shall be capitalized as film costs
inventory and shall be amortized using the individual film
forecast computation method.
G. Operating expenses and all type of income are recognized in the
period in which the activities occur.
H. Depreciation: The cost of property and equipment is depreciated
over the estimated useful lives of the related assets. The cost
of leasehold improvements is amortized over the lesser of the
length of the lease of the related assets for the estimated lives
of the assets. Depreciation and amortization is computed on the
straight line method.
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Book Corporation of America
(A Development Stage Company)
Notes to Financial Statements -Continued-
NOTE #3 - Non Cash Investing and Non Cash Financing Activities
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In 1988, the Company issued 200,000 shares of its common stock to a
related entity for assets valued at historical cost of $200,000.
The Company currently holds in its film inventory, films contributed
to the Company by principal stockholders. In the year ended October
31, 1999, the Company wrote off 100% of the cost of these films,
because it has not and has no plans to aggressively market the films.
NOTE #4 - Public Stock Offering
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In 1979, the Company conducted an intrastate public offering of its
common stock shares and issued 15,000,000 pre split, 300,000 post
split shares for net proceeds of $127,500.
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Item 2 Plan of Operation
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For a complete understanding, this Plan of Operations should be read
in conjunction with Part I- Item 1. Financial Statements to this Form
10-QSB.
Book Corporation of America (the "Company"), was incorporated
under the laws of the State of Utah on November 22, 1978 for the
purpose of (1) engaging primarily in the specific business of
acquiring, developing, owning, selling, leasing, licensing,
exploiting, and otherwise dealing with literary properties and
materials, copyrights, licenses, and other tangible and intangible
properties in connection with artistic ideas and endeavors, and to
carry on a negotiation for, production of, purchase of, sale,
licensing, distribution, advertising, and promotion of all rights,
privileges, and properties in the entertainment industry, including,
but not limited to, all types of theatrical motion pictures,
theatrical stage plays, television films, programs and commercials,
radio recordings, books, and music publications and music recordings
and (2) acting as principal, agent, joint venturer, partner, or in any
other capacity which may be authorized or approved by the Board of
Directors of the Company. The Company has no "parents" or
"predecessors," as those terms are defined under the federal
securities laws.
In 1979 the Company conducted an intrastate public offering of
its common stock. On October 10, 1988, the common stock of the
Company was reverse split 50 to 1, and the par value was changed from
$0.01 to $.005 per share. Also in October 1988, the Company acquired
Sun Television Entertainment, Inc., bringing assets of 36 motion
picture screenplays (subsequently valued at $-0-) and motion picture
production equipment was transferred to the Company by Visto
International, Inc.
Since its inception the Company has sustained continued losses
and currently has liabilities in excess of current assets. In
addition, the Company has no revenue producing activities and is
dependent upon its officers to provide for its cash requirements.
These factors indicate considerable doubt as to the Company's ability
to continue as a going concern. To date the Company has been
unsuccessful in its efforts to develop its entertainment business.
Therefore, the Company intends to seek, investigate, and if
warranted, acquire an interest in a business opportunity. The Company
proposes to seek a business opportunity within the entertainment
industry. The Company has unrestricted discretion in seeking and
participating in a business opportunity, subject to the availability
of such opportunities, economic conditions and other factors.
The selection of a business opportunity in which to participate
is complex and extremely risky and will be made by management in the
exercise of its business judgment. There is no assurance that the
Company will be able to identify and acquire any business opportunity
which will ultimately prove to be beneficial to the Company and its
shareholders.
The risks inherent in seeking a business interest are further
complicated as a result of the fact that the Company is a dormant
company, holds limited resources and is unable to provide a
prospective business opportunity with capital.
8
The Company's limited resources include property and equipment
that have been completely depreciated. In addition, the Company has
been unable to market its films which are now more than twenty-five
years old. The Company does not anticipate any future market
developing for the films, and subsequently, in October 1999 the value
of the films were written down to $-0- for each film. Because the
Company's resources are limited to depreciated and unmarketable
property, the company's ability to acquire a business opportunity with
the entertainment industry may be affected.
Sources of Opportunities
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It is anticipated that business opportunities may be available to
the Company from various sources, including its officers and
directors, professional advisers, securities broker-dealers, venture
capitalists, members of the financial community, and others who may
present unsolicited proposals.
The Company will seek a potential business opportunity from all
known sources, but will rely principally on personal contacts of its
officers and directors as well as indirect associations between them
and other businesses and professional people. Although the Company
does not anticipate engaging professional firms specializing in
business acquisitions or reorganizations, if management deems it in
the best interest of the Company, such firms may be retained. In some
instances, the Company may publish notices or advertisements seeking a
potential business opportunity in financial or trade publications.
Criteria
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The Company intends to focus its search for prospective business
opportunities to the area of entertainment. However, should other
opportunities become available, the Company may also consider
opportunities outside the entertainment industry based on criteria
outlined below.
In analyzing prospective business opportunities, management will
consider such matters as the available technical, financial and
managerial resources; working capital and other financial
requirements; the history of operations; prospects for the future; the
nature of present and expected competition; the quality and experience
of management services which may be available and the depth of the
management; the potential for success of the opportunity; the
potential for growth and expansion; the potential for profit; and
other relevant factors.
To a large extent, a decision to participate in a specific
business opportunity may be made upon management's analysis of the
quality of the other firm's management and personnel, the ability to
market products, and numerous other factors which are difficult if not
impossible to analyze through the application of any objective
criteria. In many instances, it is anticipated that the results of
operations of a specific firm may not necessarily be indicative of the
potential for the future because of the requirement to substantially
augment management, or other factors.
Generally, the Company will analyze all factors in the
circumstances and make a determination based upon a composite of
available facts, without reliance upon any single fact as controlling.
9
Methods of Participation of Acquisition
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Specific business opportunities will be reviewed and on the basis
of that review the legal structure or method of participation deemed
by management to be suitable will be selected. The Company may
consider structures and methods such as leases, purchase and sale
agreements, licenses, joint ventures, or other contractual
arrangements and may involve a reorganization, merger or consolidation
transaction. The Company may act directly or indirectly through an
interest in a partnership, corporation, or other form of organization.
Procedures
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As part of the Company's investigation of business opportunities,
officers and directors may meet personally with management and key
personnel of the firm sponsoring the business opportunity, visit and
inspect material facilities, obtain independent analysis or
verification of certain information provided, check references of
management and key personnel, and conduct other reasonable measures.
The Company will generally request that it be provided with
written materials regarding the business opportunity containing such
items as: a description of product, service and company history;
management resumes; financial information; available projections with
related assumptions upon which they are based; and explanation of
proprietary products and services; present and proposed forms of
compensation to management; a description of transactions between the
prospective entity and its affiliates; relevant analysis of risks and
competitive conditions; a financial plan of operation and estimated
capital requirements; and other information deemed relevant.
Competition
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The Company expects to encounter substantial competition in its
efforts to acquire a business opportunity. The primary competition is
from other companies, organized and funded for similar purposes, small
venture capital partnerships and corporations, small business
investment companies and wealthy individuals who are interested in a
business opportunity. Many of these companies and groups have
substantial financial and personal resources which give such companies
considerable advantage over the Company.
Employees
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The Company does not currently have any employees but relies upon
the efforts of its officers and directors to conduct the business of
the Company.
The Company has no cash on hand and has experienced losses from
inception. As of October 31, 2001, the Company had liabilities
amounting to $16,307. The Company has no material commitments for
capital expenditures for the next twelve months.
Should a business opportunity become available to the Company,
the Company's management may seek to raise additional capital by
investment from outsiders in the Company's common stock.
10
PART II OTHER INFORMATION
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Item 1 Legal Proceedings
None.
Item 2 Changes in Securities
None.
Item 3 Defaults Upon Senior Securities
None.
Item 4 Submission of Matters to a Vote of Security Holders
None.
Item 5 Other Information
None.
Item 6 Exhibits and Reports on Form 8-k
(a) Exhibits - Exhibit 27- Financial Data Schedule
(b) Reports on Form 8-k
The Company filed a current report on Form 8-k April 6, 2001, in
which the Company reported a change in certifying accountants.
11
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SIGNATURES
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In accordance with Section 12 of the Securities Exchange Act of
1934, the registrant caused this registration statement to be signed
on its behalf, thereunto duly authorized.
Book Corporation of America
Date: June 12, 2001 By: /s/ William Messerli
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President
Date: June 12, 2001 By: /s/ Philip Yordan
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Treasurer
11
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SIGNATURES
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In accordance with Section 12 of the
Securities Exchange Act of 1934, the registrant caused this
registration statement to be signed on its behalf, thereunto duly
authorized.
Book Corporation of America
Date: June 12, 2001 By:
------------------------
President
Date: June 12, 2001 By:
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Treasurer
13