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: March 31, 1999
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 March
31, 1999: 2,305,500
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
See attached.
ITEM 2: MANAGEMENT'S DISCUSSION & ANALYSIS OR PLAN OF OPERATIONS
On March 31, 1999, the Company discontinued its network marketing
operations. The total revenues generated by the discontinued
operations amounted to $0 for the three months ended March 31,
1999 and $541 for the year ended December 31, 1998.
The Company currently has no on-going operations. At the present
time, the Company is looking for a different line of business or
for a potential merger or business acquisition. Any such
business acquisition with an operating company will likely be
structured as a reverse acquisition in which a controlling
interest in the Company will be acquired by the successor
operation. In such a transaction, the shareholders of the
Company will likely own a minority interest in the combined
company after the acquisition, and present management of the
company will likely resign and be replaced by the principals of
the operating company. This type of transaction will leave the
current shareholders with only a small minority voice in the
operating business and their interest may be insufficient to
control any seats of the board of directors or to have any
substantial voice in other corporate transactions.
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.
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<PAGE>
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
-3-
<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: May 13, 1999 by: /s/ L. Dee Hall
L. Dee Hall, Secretary
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<PAGE>
HEALTH BUILDERS INTERNATIONAL, INC.
[A Development Stage Company]
UNAUDITED CONDENSED BALANCE SHEETS
ASSETS
March 31, December 31,
1999 1998
___________ ___________
CURRENT ASSETS:
Cash in bank $ 18,497 $ 21,138
___________ ___________
Total Current Assets 18,497 21,138
ASSETS OF DISCONTINUED
OPERATIONS, net - 566
OTHER ASSETS:
Organizational costs, net 467 517
___________ ___________
$ 18,964 $ 22,221
___________ ___________
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable 2,477 3,810
___________ ___________
Total Current Liabilities 2,477 3,810
___________ ___________
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 50,707 50,707
Deficit accumulated during the
development stage (36,526) (34,602)
___________ ___________
Total Stockholders' Equity 16,487 18,411
___________ ___________
$ 18,964 $ 22,221
___________ ___________
NOTE: The balance sheet at December 31, 1998 was taken from the audited
financial statements at that date and condensed.
The accompanying notes are an integral part of these condensed financial
statements.
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<PAGE>
HEALTH BUILDERS INTERNATIONAL, INC.
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
For the Three From Inception
Months Ended on July 3,
March 31, 1996 Through
__________ _________ March 31,
1999 1998 1999
__________ __________ _____________
REVENUE $ - $ - $ -
EXPENSES - - -
__________ __________ _____________
LOSS FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES - - -
__________ __________ _____________
CURRENT TAX EXPENSE - - -
DEFERRED TAX EXPENSE - - -
__________ __________ _____________
LOSS FROM CONTINUING OPERATIONS - - -
__________ __________ _____________
DISCONTINUED OPERATIONS
loss from operations of
discontinued network
marketing operation (1,924) (7,487) (36,526)
loss on disposal of network
marketing operations - - -
__________ __________ _____________
LOSS FROM DISCONTINUED
OPERATIONS (1,924) (7,487) (36,526)
__________ __________ _____________
NET LOSS $ (1,924) $ (7,487) $ (36,526)
__________ __________ _____________
LOSS PER COMMON SHARE
Continuing operations $ - $ - $ -
Discontinued operations of
network Marketing operation (.00) (.00) (.02)
Disposal of discontinued network
marketing operations - - -
__________ __________ _____________
Loss Per Share $ (.00) $ (.00) $ (.02)
__________ __________ _____________
The accompanying notes are an integral part of these unaudited condensed
financial statements.
-6-
<PAGE>
HEALTH BUILDERS INTERNATIONAL, INC.
[A Development Stage Company]
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
For the Three From Inception
Months Ended on July 3,
March 31, 1996 Through
__________ _________ March 31,
1999 1998 1999
__________ __________ _____________
Cash Flows from Operating
Activities:
Net loss $ (1,924) $ (7,487) $(36,526)
Adjustments to reconcile net
loss to net cash used by
operating activities:
Loss on disposal of fixed
assets 537 - 537
Depreciation expense 29 18 129
Amortization expense 50 50 533
Changes in assets and
liabilities:
Increase (decrease) in
accounts payable (1,333) 1,479 2,477
__________ __________ _____________
Net Cash Provided (Used)
by Operating Activities (2,641) (5,940) (32,850)
__________ __________ _____________
Cash Flows from Investing
Activities:
Payment of organization costs - - (1,000)
Certificate of deposit - (234) -
Property, plant and equipment - - 665
__________ __________ _____________
Net Cash Provided (Used)
by Investing Activities - (234) (1,665)
__________ __________ _____________
Cash Flows from Financing
Activities:
Proceeds from common stock
issuance - - 71,100
Payments for stock offering
costs - - (18,088)
__________ __________ _____________
Net Cash Provided by
Financing Activities - - 53,012
__________ __________ _____________
Net Increase (Decrease) in Cash (2,641) (6,174) 18,497
Cash at Beginning of Period 21,138 17,076 -
__________ __________ _____________
Cash at End of Period $ 18,497 $ 10,902 $ 18,497
__________ __________ _____________
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 March 31, 1999:
None
For the period ended March 31, 1998:
None
The accompanying notes are an integral part of these unaudited condensed
financial statements.
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<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 was formed to engage in
the business of establishing a multi-level marketing network to provide
customized mailing and fax services for various network marketing companies.
On March 31, 1999, the Company discontinued its network marketing operations
and is considering other business opportunities or possible acquisitions. 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
March 31, 1999 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, 1998
audited financial statements. The results of operations for the periods ended
March 31, 1999 and 1998 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.
Restatement - The financial statements have been restated for all periods
presented to reflect management's decision to discontinue the Company's
network marketing business.
NOTE 2 - 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 March 31, 1999, the Company has available unused
operating loss carryforwards of approximately $36,000, which may be applied
against future taxable income and which expire in 2011 through 2014.
-8-
<PAGE>
HEALTH BUILDERS INTERNATIONAL, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 2 - INCOME TAXES [Continued]
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 $12,400 and
$11,700 as of March 31, 1999 and December 31, 1998, respectively, with an
offsetting valuation allowance at each period end of the same amount resulting
in a change in the valuation allowance of approximately $700 for the three
months ended March 31, 1999.
NOTE 3 - EARNINGS (LOSS) PER SHARE
The following data show the amounts used in computing earnings (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 March 31, 1999 and
1998, and from inception on July 3, 1996 through March 31, 1999:
For the Three From Inception
Months Ended on July 3,
March 31, 1996 Through
__________ _________ March 31,
1999 1998 1999
__________ __________ _____________
Income (loss) from continuing
operations applicable to
common stock (numerator) $ - $ - $ -
__________ __________ _____________
Gain (loss) from operations of
discontinued network marketing
operation (numerator) $ (1,924) $ (7,487) $(36,526)
__________ __________ _____________
Gain (loss) from disposition of
discontinued network marketing
operations (numerator) $ - $ - $ -
__________ __________ _____________
Weighted average number of
common shares outstanding
used in earnings per share
during the period
(denominator) 2,305,500 2,305,500 2,173,952
__________ __________ _____________
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.
-9-
<PAGE>
HEALTH BUILDERS INTERNATIONAL, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
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 $0 and $533 in consulting fees during the
three months ended March 31, 1999 and 1998.
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 - DISCONTINUED OPERATIONS
On March 31, 1999, the Company discontinued its network marketing operations.
The total revenues generated by the discontinued operations amounted to $0 for
the three months ended March 31, 1999 and $541 for the year ended December 31,
1998.
The Company currently has no on-going operations. At the present time, the
Company is looking for a different line of business or for a potential
merger or business acquisition. Any such business acquisition with an
operating company will likely be structured as a reverse acquisition in
which a controlling interest in the Company will be acquired by the
successor operation. In such a transaction, the shareholders of the
Company will likely own a minority interest in the combined company after
the acquisition, and present management of the company will likely resign
and be replaced by the principals of the operating company. This type of
transaction will leave the current shareholders with only a small minority
voice in the operating business and their interest may be insufficient to
control any seats of the board of directors or to have any substantial
voice in other corporate transactions.
The following is a summary of assets of discontinued operations, at cost, less
accumulated depreciation:
March 31, December 31,
1999 1998
_________ ____________
Equipment $ - $ 665
Less Accumulated depreciation - (99)
_________ ____________
$ - $ 566
_________ ____________
Depreciation expense for the three months ended March 31, 1999 and 1998 was
$29 and $18, respectively.
-10-
<PAGE>
HEALTH BUILDERS INTERNATIONAL, INC.
[A Development Stage Company]
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 5 - DISCONTINUED OPERATIONS [Continued]
During the quarter ended March 31, 1999, property and equipment, consisting
primarily of a VCR machine and a fax machine, was abandoned. Loss on the
disposal of the equipment amounted to $537.
The following is a condensed proforma statement of operations that reflects
what the presentation would have been for the periods presented without the
reclassifications required by "discontinued operations" accounting
principles:
For the Three From Inception
Months Ended on July 3,
March 31, 1996 Through
__________ _________ March 31,
1999 1998 1999
__________ __________ _____________
Revenue $ - $ - $ 541
Expense (1,536) (7,847) (37,856)
Other income (expense) (388) 360 789
__________ __________ _____________
Net loss $ (1,924) $ (7,487) $(36,526)
__________ __________ _____________
Loss per share $ (.00) $ (.00) $ (.02)
__________ __________ _____________
Net Assets of the Company from discontinued operations consisted of the
following and have been reclassified in the accompanying financial
statements:
March 31, December 31,
1999 1998
___________ ______________
Property and equipment $ - $ 566
___________ ______________
Net assets of discontinued
operations $ - $ 566
___________ ______________
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from financial statements for the three month period ended
March 31, 1999, and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 18,497
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 18,497
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 18,964
<CURRENT-LIABILITIES> 2,477
<BONDS> 0
0
0
<COMMON> 2,306
<OTHER-SE> 14,181
<TOTAL-LIABILITY-AND-EQUITY> 18,964
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> (1,924)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,924)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
