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, 2002 0-30653
BOOK CORPORATION OF AMERICA
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(Name of small business issuer in its chapter)
Utah 87-0375228
(State or other jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
1725 East Warm Springs Road, Suite 10, Las Vegas, Nevada 89119
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code (702) 731-4111
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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, 2002, 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.
[Left blank intentionally]
2
PART I FINANCIAL INFORMATION
Book Corporation of America
(A Development Stage Company)
Balance Sheet
<Table>
<Caption>
April October
30, 2002 31, 2001
----------- -----------
(Unaudited)
Assets
Current Assets $ - $ -
- -------------- ----------- -----------
Total Current Assets $ - $ -
=========== ===========
Liabilities & Stockholders' Equity
Current Liabilities
- -------------------
Accounts Payable $ - $ 37,336
Taxes Payable 450 450
----------- -----------
Total Current Liabilities 450 37,786
Stockholders' Equity
- --------------------
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
Contributed Capital (Note 3) 61,189 -
Deficit in Retained Earnings (3,115,098) (3,091,245)
----------- -----------
Total Stockholders' Equity (450) (37,786)
----------- -----------
Total Liabilities &
Stockholders' Equity $ - $ -
=========== ===========
</Table>
See accompanying notes to financial statements.
3
Book Corporation of America
(A Development Stage Company)
Statements of Operations
(Unaudited)
<Table>
<Caption>
For the Three Months For the Six Months
Ended April 30 Ended April 30
2002 2001 2002 2001
---------- ---------- ---------- ----------
Revenues $ - $ - $ - $ -
- -------- ---------- ---------- ---------- ----------
Expenses
- --------
Administrative
Expenses $ 13,312 $ 3,488 $ 23,853 $ 5,302
---------- ---------- ---------- ----------
Net Loss $ (13,312) $ (3,488) $ (23,853) $ (5,302)
========== ========== ========== ==========
Net Loss Per Share
of Common Stock $ (0.01) $ (0.00) $ (0.01) $ (0.00)
Weighted Average
Number Of Shares
Outstanding
During Period 2,349,540 2,349,540 2,349,540 2,349,540
</Table>
See accompanying notes to financial statements.
4
Book Corporation of America
(A Development Stage Company)
Statement of Cash Flow
(Unaudited)
<Table>
<Caption>
For the Six Months Ended
April 30, April 30,
2002 2001
----------- -----------
Cash Flows from Operating Expenses
- ----------------------------------
Net (Loss) $ (23,853) $ (5,302)
Adjustments to Reconcile Net Loss to
Increase in Accounts Payable (37,336) 5,302
----------- -----------
Net Cash (Used) by Operating Expenses (61,189) -
Cash Flows from Investing Activities
- ------------------------------------
Contributed Capital 61,189 -
----------- -----------
Net Cash Flows from
Investing Activities 61,189 -
Cash Flows from Financing Activities - -
- ------------------------------------ ----------- -----------
Net Cash Provided (Used) by
Financing Activities - -
Increase (Decrease) in Cash - -
Cash at Beginning of Period - -
----------- -----------
Cash at End of Period $ - $ -
=========== ===========
Disclosures for Operating Activities
- ------------------------------------
Interest $ - $ -
Taxes - -
</Table>
See accompanying notes to financial statements.
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Book Corporation of America
(A Development Stage Company)
Notes to Financial Statements
April 30, 2002
NOTE #1 - Organization
- ----------------------
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
- -----------------------------------------
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
April 30, 2002
NOTE #3 -Contributed Capital
- ----------------------------
During the quarter ended April 30, 2002, an unrelated party contributed
$61,189 to the Company which was used to satisfy its creditors.
Item 2 Plan of Operation
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
contributions to capital 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.
The Company is seeking business opportunities. In March 2002, REIT
Consultants, LLC, a Nevada limited liability company acquired the
controlling interest in the Company. In April 2002, the Company entered
into a non-binding letter of intent with Seashore Diversified Investment
Company ("Seashore"), a Maryland corporation, to negotiate the possible
acquisition of real estate holdings from Seashore in exchange for
restricted shares of the Company's capital stock. Seashore is a real
estate investment trust and is in the business of acquiring, selling and
managing real estate holdings.
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Pursuant to the terms of the letter of intent, the Company has agreed
to attempt to negotiate a definitive agreement with Seashore setting forth
the specific terms for the acquisition of real estate holdings. The
Company intends to primarily acquire partial interests in a number of
income producing properties throughout the United States. Given that
Seashore is continously buying and selling real estate, and the fact that
the Company has not negotiated the specific terms of a definitive
agreement, it is impossible to know what properties, if any, the Company
may acquire from Seashore. The Company has been waiting to negotiate the
terms of a definitive agreement until such time as it can obtain
shareholder approval to authorize the establishment of Preferred Shares to
assure it has the ability to perform any agreement that might be reached
with Seashore.
By its terms, the letter of intent automatically terminates on June
30, 2002. If the Company is unable to execute a definitive agreement prior
to that time, it may seek to extend the letter of intent if it believes
that doing so is in the best interest of its shareholders. The Company
does not know if Seashore has any interest in extending the termination
date of the letter of intent.
If the Company cannot negotiate a definitive agreement with Seashore,
it has unrestricted discretion in seeking and participating in any other
business opportunity, subject to the availability of such opportunities,
economic conditions and other factors. The selection of a business
opportunity 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 a 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,
has limited resources and is unable to provide a prospective business
opportunity with capital.
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 was written down to
$-0-.
Sources of Opportunities
If the Company is unable to negotiate a definitive agreement to
acquire real estate holdings from Seashore, it is anticipated that business
opportunities may be available to the Company from other sources, including
its officer and director, professional advisers, securities broker-dealers,
venture capitalists, members of the financial community, and others who may
present unsolicited proposals. If the Company has to seek other
opportunities, it will investigate potential business opportunity from all
known sources, but will rely principally on personal contacts of its
officer and director as well as indirect associations between him 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.
8
Criteria
Should the Company be unable to negotiate a definitive agreement with
Seashore, it intends to focus its search for prospective business
opportunities to the area of acquisition or interests in real estate
holdings. However, should other opportunities become available, the
Company may also consider opportunities outside the real estate 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.
Generally, the Company will analyze all factors and circumstances and
make a determination based upon a composite of available facts, without
reliance upon any single fact as controlling.
Employees
The Company does not currently have any employees but relies upon the
efforts of its officer and director to conduct the business of the Company.
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.
PART II OTHER INFORMATION
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
Although there have not been any matters submitted to security holders
for their vote, the Company has filed a Preliminary Proxy Statement with
the Securities and Exchange Commission and intends to submit matters at a
shareholder meeting to be held this quarter. See Item 5.
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Item 5 Other Information
The Company recently filed a Preliminary 14-A Proxy Statement with the
Securities and Exchange Commission and is planning on holding a shareholder
meeting within the next twenty to sixty days. The exact date of, and items
to be voted upon at, the shareholder meeting will be set forth in a
Definitive 14-A Proxy Statement to be filed with the Securities and
Exchange Commission.
Item 6 Exhibits and Reports on Form 8-k
(a) Reports on Form 8-k
A report on Form 8-K was filed by the Company which was posted on
EDGAR April 8, 2002. The current report cited a change in control under
Item 1 in which REIT Consultants, LLC, a Nevada limited liability company
acquired 2,000,000 shares of restricted Common Stock of the Company held by
William Messerli and Philip Yordan in a private transaction. At the time
of this transaction, Mr. Messerli and Mr. Yordan were officers and
directors of the Company.
The Form 8-K also reported the resignation of directors under Item 6
in which the Company accepted the resignations of William Messerli and
Philip Yordan.
10
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SIGNATURES
- --------------------------------------------------------------------------
In accordance with the Securities Exchange Act of 1934, the registrant
caused this report to be signed on its behalf, thereunto duly authorized.
Book Corporation of America
Date: June 21, 2002 By: /s/ Ronald Robinson
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President
Date: June 21, 2002 By: /s/ Ronald Robinson
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Treasurer