SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 1998
[ ] Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from __________ to __________
Commission file number O-23859
AMERICAN CUSTOM COMPONENTS, INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)
Nevada 81-0478643
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) identification No.)
3310 W. MacArthur Blvd.
Santa Ana, CA 92704
(Address of Principal Executive Offices)
(714) 662-2080
(Issuer's Telephone Number, Including Area Code)
(Former Name, Former Address and Former Fiscal Y ear,
if Changed Since Last Report)
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 reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes No X
State the number of shares outstanding of each of the
issuer's classes of common equity, as of the latest practicable
date: As of June 30, 1998, there were 10,789,292 shares of common
stock outstanding.
<PAGE>
AMERICAN CUSTOM COMPONENTS, INC.
INDEX
Page
Part I Financial Information
Item 1. Financial Statements
Balance sheet as of June 30, 1998 (unaudited). . . . 3
Statements of operations for the three months ended
June 30, 1998 and 1997 (unaudited) . . 4
Statements of cash flows for the three months ended
June 30, 1998 and 1997 (unaudited) . . 5
Item 2. Managements Discussion and Analysis or Plan of
Operation . . . 6
Part II Other Information
Item 1. Legal Proceedings. . . . . . . 6
Item 2. Changes in Securities. . . . . 6
Item 3. Defaults Upon Senior Securities. . . . 7
Item 4. Submission of Matters to a Vote of Security Holders. . . 7
Item 5. Other Information. . . . . . . 7
Item 6. Exhibits and Reports on Form 8-K . . . 7
<PAGE>
PART I - FINANCIAL STATEMENTS
Item 1. Financial Statements
AMERICAN CUSTOM COMPONENTS, INC.
BALANCE SHEET
June 30, 1998
ASSETS
Current Assets:
Cash $ 37,163
Accounts receivable, net 192,261
Inventories 149,058
Total current assets 378,482
Property and equipment, net 813,225
Other assets 296,918
Total assets 1,488,625
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable 233,348
Bank overdraft 0
Line of Credit 40,179
Notes payable, current 346,575
Income taxes payable 3,200
Total current liabilities 623,302
Notes payable, net of current portion 273,475
Total liabilities 896,777
Commitments and contingencies
Shareholders' equity (deficit)
Common stock ($0.001 par value; 25,000,000
shares authorized; 10,789,292 shares issued
and outstanding as of June 30, 1998) 10,789
Additional paid-in capital 1,545,008
Accumulated deficit <963,949>
Total shareholders' equity (deficit) 591,848
Total liabilities and shareholders' equity (deficit) 1,488,625
<PAGE>
AMERICAN CUSTOM COMPONENTS, INC.
STATEMENTS OF OPERATIONS
Three months Three months
ended June 30, 1998 ended June 30, 1997
Net sales $ 408,780 972,965
Cost of sales 216,653 506,775
Gross profit 192,127 466,190
Operating costs and expenses:
Wages and salaries 89,353 91,578
Options compensation expense 0 0
Selling and promotion 31,350 11,530
Insurance 35,989 41,732
Professional fees 27,335 92,862
Depreciation and
amortization expense 27,635 47,100
Research and development 0 0
Other operating expenses 3,500 140,656
Total costs and expenses 215,162 425,458
Income (loss) from operations <23,035> 40,732
Other expense:
Interest expense 0 31,525
Income (loss) before provision
for taxes <23,035> 9,207
Provision for income taxes 0 800
Net income (loss) <23,035> 8,407
Earnings (loss) per share - basic <.002> 1.12
Weighted average number of shares
outstanding - basic 9,726,572 7,447
<PAGE>
AMERICAN CUSTOM COMPONENTS, INC.
STATEMENTS OF CASH FLOWS
Three months Three Months
ended June 30, 1998 ended June 30, 1997
Cash flows from operating activities:
Net income (loss) $< 23,035> 8,407
Adjustments to reconcile
income (loss) to net cash
provided by operating
activities:
Depreciation and amortization 27,635 47,100
Uncollectible accounts receivable 0 0
Compensation expense resulting
from the granting of options 0 0
Decrease (increase) in assets:
Accounts receivable <112,087> <108,163>
Inventories 78,407 <35,480>
Other assets 0 80
Increase in liabilities
Accounts payable <223,629> 7,887
Line of credit 0 0
Income taxes payable <800> 21,248
Cash used in operating activities <253,509> <58,921>
Cash flows used in investing activities:
Acquisition of property and equipment<88,889> <98,025>
Increase in other assets 0 0
Cash used in investing activities <88,889> <98,025>
Cash flows provided by (used in)
financing activities:
Principal reduction of notes payable 0 0
Proceeds from notes payable 0 0
Issuance of common stock 248,443 224,925
Cash provided by financing activities 248,443 224,443
Net increase (decrease) in cash <93,955> 68,875
Cash, beginning of period 131,118 0
Cash, end of period 37,163 0
<PAGE>
Item 2. Managements Discussion and Analysis or Plan of Operation
Results of Operations
During the first three months of the Company's fiscal year,
the Company focused a significant amount of resources on recovering
from the loss of two major customers who experienced financial
difficulty. The loss of these two customers, as well as expansion
costs, resulted in a shortage of cash flow for the period.
Net Sales decreased from $972,965 for the three months ended
June 30, 1997 to $408,780 for the three months ended June 30, 1998.
This decrease was due primarily to the customer loss as described
above. During those same periods, selling and promotion expenses
increased from $11,530 to $31,350 as the Company attempted to
recover from the loss of those two major customers.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is presently, has been, and may from time to time
be involved in various claims, lawsuits, disputes with third
parties, actions involving allegations of discrimination, or breach
of contract actions incidental to the operation of its business.
The Company is not currently involved in any such litigation which
it believes could have a materially adverse effect on its financial
condition or results of operations.
Item 2. Changes in Securities
In April 1998, the Company sold an aggregate of 14,000
restricted shares of common stock under Rule 506 of Regulation D and
Section 4(2) of the Securities Act of 1933 to the Victor M. DiMattia
Revocable Trust, an accredited investors, for $1.75 per share,
resulting in net proceeds to the Company of $24,500.
In May 1998, the Company sold an aggregate of 80,000 shares
of common stock under Section 4(2) of the Securities Act of 1933 to
Dremer Holdings, S.A., an accredited investor, for $1.25 per share,
resulting in net proceeds to the Company of $100,000.
In May 1998, the Company issued 8,571 shares of restricted
common stock to MRC Legal Services Corporation, an accredited
entity, in consideration for the cancellation of outstanding open
account indebtedness. This issuance was exempt under Section 4(2)
of the Securities Act of 1933.
In June 1998, the Company issued an aggregate of 40,000
shares of restricted common stock to Harold James Prow and Miguel
Gill, both sophisticated individuals given full access to the books
and records of the Company, as consideration for deferred
compensation. The issuance was exempt under Rule 506 and Section
4(2) of the Securities Act of 1933.
<PAGE>
In June 1998, the Company issued an aggregate of 100,000
shares of restricted common stock to Charles Rosenblum, an
accredited investor, pursuant to an exercise of options issued under
Rule 506 and Section 4(2) of the Securities Act of 1933.
In June 1998, the Company issued an aggregate of 10,000
shares of restricted common stock to Hal Gardner, an accredited
investor, as consideration for deferment of interest on a promissory
note. The issuance was exempt under Rule 506 and Section 4(2) of
the Securities Act of 1933.
In June 1998, the Company issued 952,381 shares of restricted
common stock to Primex U.S.A., Inc., an accredited investor, in
anticipation of the purchase of those shares at a price of $0.50 per
share. The issuance was exempt under Rule 506 and Section 4(2) of
the Securities Act of 1933.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to the security holders for a vote.
Item 5. Other Information
There is no other information deemed material by management
for disclosure herein.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None.
(b) Reports on Form 8-K
None.
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
AMERICAN CUSTOM COMPONENTS, INC.
Dated: March 26, 1999 /s/ John Groom
________________________________
By: John Groom
Its: President
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<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> MAR-31-1998 MAR-31-1997
<PERIOD-END> JUN-30-1998 JUN-30-1997
<CASH> 37,163 0
<SECURITIES> 0 0
<RECEIVABLES> 192,261 0
<ALLOWANCES> 0 0
<INVENTORY> 149,058 0
<CURRENT-ASSETS> 378,482 0
<PP&E> 813,225 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 1,488,625 0
<CURRENT-LIABILITIES> 623,302 0
<BONDS> 0 0
0 0
0 0
<COMMON> 10,789 0
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 1,488,625 0
<SALES> 408,780 972,965
<TOTAL-REVENUES> 408,780 972,965
<CGS> 216,653 506,775
<TOTAL-COSTS> 216,653 506,775
<OTHER-EXPENSES> 215,162 425,458
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 31,525
<INCOME-PRETAX> (23,035) 9,207
<INCOME-TAX> 0 800
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (23,035) 8,407
<EPS-PRIMARY> (.002) 1.12
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