U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: September 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 333-9809
HEALTH BUILDERS INTERNATIONAL, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 87-0561634
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
2077 Elderberry Way, Sandy, Utah 84092
(Address of principal executive offices)
(801) 553-8972
(Issuer's telephone number, including area code)
Check whether the issuer (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period
that the issuer was required to file such report(s), and (2) has
been subject to such filing requirements for the past 90 days.
YES [X] NO [ ]
The number of $.001 par value common shares outstanding at
September 30, 1998: 2,305,500
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
HEALTH BUILDERS INTERNATIONAL, INC.
[A Development Stage Company]
UNAUDITED CONDENSED BALANCE SHEETS
ASSETS
September 30, December 31,
1998 1997
___________ ___________
CURRENT ASSETS:
Cash in bank $21,112 $ 17,076
Certificate of deposit - held
to maturity - 20,096
___________ ___________
Total Current Assets 21,112 37,172
___________ ___________
PROPERTY AND EQUIPMENT, net 596 368
___________ ___________
OTHER ASSETS:
Organizational costs, net 567 717
___________ ___________
Total Other Assets 567 717
___________ ___________
$ 22,275 $ 38,257
___________ ___________
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable 1,906 1,298
___________ ___________
Total Current Liabilities 1,906 1,298
___________ ___________
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value,
500,000 shares authorized,
no shares issued and outstanding - -
Common stock, $.001 par value,
50,000,000 shares authorized,
2,305,500 shares issued and
outstanding 2,306 2,306
Capital in excess of par value 50,706 50,706
Deficit accumulated during the
development stage (32,643) (16,053)
___________ ___________
Total Stockholders' Equity 20,369 39,959
___________ ___________
$ 22,275 $ 38,257
___________ ___________
NOTE: The balance sheet at December 31, 1997 was taken from the
audited financial statements at that date and condensed.
The accompanying notes are an integral part of these unaudited
condensed financial statements.
<PAGE>
HEALTH BUILDERS INTERNATIONAL, INC.
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
For the Three For the Nine From Inception
Months Ended Months Ended on July 3,
September 30, September 30, 1996 Through
________________ _________________ September 30,
1998 1997 1998 1997 1998
_______ _______ _______ _______ _______
REVENUE:
Commissions earned $ 65 $ - $ 541 $ - $ 541
_______ _______ _______ _______ _______
EXPENSES:
General and
administrative 2,483 1,096 17,984 4,577 34,191
_______ _______ _______ _______ _______
INCOME (LOSS) FROM
OPERATIONS (2,418) (1,096) (17,443) (4,577) (33,650)
OTHER INCOME:
Interest 215 - 854 - 1,007
_______ _______ _______ _______ _______
LOSS BEFORE INCOME
TAXES (2,203) (1,096) (16,589) (4,577) (32,643)
CURRENT TAX EXPENSE - - - - -
DEFERRED TAX EXPENSE - - - - -
_______ _______ _______ _______ ________
NET LOSS $ (2,203) $ (1,096) $(16,589) $ (4,577) $ (32,643)
_______ _______ _______ _______ ________
LOSS PER COMMON
SHARE $ (.00) $ (.00) $ (.01) $ (.00) $ (.02)
_______ _______ _______ _______ ________
The accompanying notes are an integral part of these unaudited
condensed financial statements.
<PAGE>
HEALTH BUILDERS INTERNATIONAL, INC.
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
For the Nine From Inception
Months Ended on July 3,
September 30, 1996 Through
______________________ September 30,
1998 1997 1998
__________ __________ __________
Cash Flows to Operating Activities:
Net loss $(16,590) $(3,481) $(32,643)
Adjustments to reconcile net
loss to net cash used by
operating activities:
Depreciation expense 67 - 70
Amortization expense 150 100 433
Changes in assets and liabilities:
Increase in accounts payable 608 1,791 1,906
__________ __________ __________
Net Cash Provided (Used)
by Operating Activities (15,765) (1,590) (30,234)
__________ __________ __________
Cash Flows to Investing Activities:
Payment of organization costs - - (1,000)
Certificate of deposit 20,096 - -
Property, plant and equipment (295) - (666)
__________ __________ __________
Net Cash Provided (Used)
by Investing Activities 19,801 - (1,666)
__________ __________ __________
Cash Flows from Financing Activities:
Proceeds from common stock issuance - - 71,100
Payments for stock offering costs - (979) (18,088)
__________ __________ __________
Net Cash Provided by Financing
Activities - (979) 53,012
__________ __________ __________
Net Increase (Decrease) in Cash 4,036 (2,569) 21,112
Cash at Beginning of Period 17,076 2,603 -
__________ __________ __________
Cash at End of Period $ 21,112 $ 34 $ 21,112
__________ __________ __________
Supplemental Disclosures of Cash Flow information:
Cash paid during the period for:
Interest $ - $ - $ -
Income taxes $ - $ - $ -
Supplemental schedule of Noncash Investing and Financing
Activities:
For the period ended September 30, 1998:
None
For the period ended September 30, 1997:
Stock offering costs of $1,295 have been accrued into
accounts payable at September 30, 1997.
The accompanying notes are an integral part of these unaudited
condensed financial statements.
<PAGE>
HEALTH BUILDERS INTERNATIONAL, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - The Company was organized under the laws of the
State of Delaware on July 3, 1996. The Company has not yet
generated significant revenues from its planned principal
operations and is considered a development stage company as
defined in SFAS No. 7. The Company is planning to engage in
the business of establishing a multi-level marketing network
to provide customized mailing and fax services for various
network marketing companies. The Company is also attempting
to form its own network marketing organization within the
communications industry. The Company has, at the present
time, not paid any dividends and any dividends that may be
paid in the future will depend upon the financial requirements
of the Company and other relevant factors.
Condensed Financial Statements - The accompanying financial
statements have been prepared by the Company without audit.
In the opinion of management, all adjustments (which include
only normal recurring adjustments) necessary to present fairly
the financial position, results of operations and cash flows
at September 30, 1998 and for all the periods presented have
been made.
Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted.
It is suggested that these condensed financial statements be
read in conjunction with the financial statements and notes
thereto included in the Company's December 31, 1997 audited
financial statements. The results of operations for the
periods ended September 30, 1998 and 1997 are not necessarily
indicative of the operating results for the full year.
Accounting Estimates - The preparation of financial statements
in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
effect the reported amounts of assets and liabilities, the
disclosures of contingent assets and liabilities at the date
of the financial statements, and the reported amounts of
revenues and expenses during the reporting period. Actual
results could differ from those estimated by management.
NOTE 2 - PROPERTY AND EQUIPMENT
The following is a summary of equipment, at cost, less
accumulated depreciation:
September 30, December 31,
1998 1997
_________ _________
Equipment $ 666 $ 371
Less Accumulated depreciation (70) (3)
_________ _________
$ 596 $ 368
_________ _________
Depreciation expense for the nine months ended September 30,
1998 and 1997 was $67 and $0, respectively.
<PAGE>
HEALTH BUILDERS INTERNATIONAL, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 3 - INCOME TAXES
The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109
"Accounting for Income Taxes". FASB 109 requires the Company
to provide a net deferred tax asset/liability equal to the
expected future tax benefit/expense of temporary reporting
differences between book and tax accounting methods and any
available operating loss or tax credit carryforwards. At
September 30, 1998, the Company has available unused operating
loss carryforwards of approximately $32,600, which may be
applied against future taxable income and which expire in 2011
through 2013.
The amount of and ultimate realization of the benefits from
the operating loss carryforwards for income tax purposes is
dependent, in part, upon the tax laws in effect, the future
earnings of the Company, and other future events, the effects
of which cannot be determined. Because of the uncertainty
surrounding the realization of the loss carryforwards the
Company has established a valuation allowance equal to the tax
effect of the loss carryforwards and, therefore, no deferred
tax asset has been recognized for the loss carryforwards. The
net deferred tax assets are approximately $11,000 and $5,400
as of September 30, 1998 and December 31, 1997, respectively,
with an offsetting valuation allowance at each period end of
the same amount resulting in a change in the valuation
allowance of approximately $5,600 for the nine months ended
September 30, 1998.
NOTE 4 - RELATED PARTY TRANSACTIONS
Management Compensation - The Company has not paid any
compensation to its officers and directors.
Related Party Compensation - Certain relatives of officers and
directors of the Company were paid a total of $1,244 and
$3,923 in consulting fees during the nine months ended
September 30, 1998 and the year ended December 31, 1997.
Office Space - The Company has not had a need to rent office
space. An officer/shareholder of the Company is allowing the
Company to use his home as a mailing address, as needed, at no
expense to the Company.
NOTE 5 - DEVELOPMENT STAGE COMPANY
The Company was formed with a very specific business plan.
However, the possibility exists that the Company could expend
virtually all of its working capital in a relatively short
time period and may not be successful in establishing on-going
profitable operations.
<PAGE>
HEALTH BUILDERS INTERNATIONAL, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 6 - EARNINGS (LOSS) PER SHARE
The following data show the amounts used in computing income
(loss) per share and the effect on income and the weighted
average number of shares of dilutive potential common stock
for the three months ended September 30, 1998, for the nine
months ended September 30, 1998 and from inception on July 3,
1996 through September 30, 1998:
For the Three For the Nine From Inception
Months Ended Months Ended on July 3,
September 30, September 30, 1996 Through
__________________ __________________September 30,
1998 1997 1998 1997 1998
_________ _________ _________ _________ _________
Income (loss)
from continuing
operations applicable
to common stock $ (2,203) $ (1,096) $(16,589) $ (4,577) $(32,643)
_________ _________ _________ _________ _________
Income (loss)
available to
common stockholders
used in income
(loss) per share $ (2,203) $ (1,096) $(16,589) $ (4,577) $(32,643)
_________ _________ _________ _________ _________
Weighted average
number of common
shares outstanding
used in earnings
per share during
the period 2,305,500 2,049,810 2,305,500 2,016,786 2,134,420
_________ _________ _________ _________ _________
Dilutive earnings per share was not presented, as the Company
had no common equivalent shares for all periods presented that
would effect the computation of diluted earnings (loss) per
share.
<PAGE>
Item 2: Management's Discussion & Analysis or Plan of Operations
The Company was incorporated on July 3, 1996. The Company
has not yet generated any revenues from operations and is
considered a development stage company. The Company has no
significant assets. To date, activities have been limited to
organizational matters and the preparation and filing of a
registration statement to register a public offering of its
securities. Pursuant thereto, the Company sold 305,500 shares of
its common stock and raised gross proceeds of $61,100.
Management's plan of operation for the next twelve months is
to use the proceeds from the offering primarily to acquire office
equipment, hire employees and cover the payroll costs and
otherwise provide operating capital during the start up period of
operations until the Company can begin generating revenues from
operations to thereafter cover ongoing expenses. The Company is
totally dependent upon the funds raised in this offering for the
ability to fully commence its intended business operations.
There is absolutely no assurance that the Company will be
able, with the proceeds of the offering, to successfully commence
proposed business operations. At this time, no assurances can be
given with respect to the or the length of time after
commencement of operations that it will be necessary to fund
operations from proceeds of the offering.
Management believes that the net proceeds from the offering
will provide working capital for one to two years after
commencement of operations, during which time management
anticipates that the Company will begin generating sufficient
revenues to cover ongoing expenses. However, there is absolutely
no assurance of this. If the Company is unsuccessful, investors
will have lost their money and management will not attempt to
pursue further efforts with respect to such business, and it is
unlikely the Company would have the financial ability to do so in
any event. Instead management will call a shareholders meeting
to decide whether to liquidate the Company or what direction the
Company will pursue, if any. However, the Company presently has
no plans, commitments or arrangements with respect to any other
potential business venture and there is no assurance the Company
could become involved with any other business venture, especially
any business venture requiring significant capital.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities and Use of Proceeds
(a) None.
(b) None.
(c) See Part I, Item 1 (financial statements) and Item 2
(management's discussion) for financial information and
a narrative discussion regarding use of proceeds.
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
None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Issuer has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Health Builders International, Inc.
Date: November 13, 1998 by: /s/ L. Dee Hall
L. Dee Hall, Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from financial statements for the nine month period ended
September 30, 1998, and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 21,112
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 21,112
<PP&E> 666
<DEPRECIATION> 70
<TOTAL-ASSETS> 22,275
<CURRENT-LIABILITIES> 1,906
<BONDS> 0
0
0
<COMMON> 2,306
<OTHER-SE> 18,063
<TOTAL-LIABILITY-AND-EQUITY> 22,275
<SALES> 541
<TOTAL-REVENUES> 541
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 17,984
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (16,589)
<INCOME-TAX> 0
<INCOME-CONTINUING> (16,589)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (16,589)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
